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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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Is an out of state resident, who moves to a Nebraska nursing

Customer Question

Is an out of state resident, who moves to a Nebraska nursing home for less than two years and dies at the Nebraska nursing home, considered a Nebraska resident for the purpose of paying Nebraska inheritance taxes?
Submitted: 2 years ago.
Category: Tax
Expert:  Wallstreet Esq. replied 2 years ago.

Wallstreet Esq. :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification

Wallstreet Esq. :

Nebraska residents would have to pay an inheritance tax,

Wallstreet Esq. :

however the question in this case is whether the person is truly a NE resident,

Wallstreet Esq. :

In order to prove that the person is not a NE resident their is a residency test that has to be met

Wallstreet Esq. :

esidency is defined as the location of your main home. It's where you go when you come back from vacation or from a temporary job or business trip. It's where you hold a valid driver's license, where your mail is sent, where your immediate family lives, where you enroll your children in school and where you register to vote. The preponderance of connections to a place determines your state of residency.

Wallstreet Esq. :

Additional evidence includes car registration, purchase of property and payment of property taxes, establishing a bank account and joining a local church or a civic or business organization.

Customer :

What are the details of the residency test? Also, all assets of this out-of-state resident are included in a revocable living trust whose implementation is goverened by North Dakota laws where the resident lived for 91 years before moving to the Nebraska nursing home for 22+months.

Wallstreet Esq. :

The test is based upon numerous factors, also intention,

Wallstreet Esq. :

She would have to prove that she intended to live in ND, and that all her assets, family, and history is in ND.

Wallstreet Esq. :

If she has all her official documents, and tax returns in ND, than she can argue that ND is her state of residence, even though she has resided in a nursing home in Nebraska,

Customer :

She died November 18 in a nursing home in the Nebraska town where her closest relative lives. This relative also was sole trustee for her trust. The trust's address was/is this town in Nebraska. However, ALL her "history" is in ND. She resided in ND for 91 years and lived in Nebraska 22+ months -- only after she lost all memory. Due to her dementia she never even knew she had moved to Nebraska.

Customer :

During her brief stay at the Nebraska nursing home she paid taxes in both ND and NE.

Wallstreet Esq. :

Does she have any assets or property in Nebraska?

Wallstreet Esq. :

To make a change of legal residence, the individual must have a physical presence in another state, show intent to establish residence in that state, and intends to abandon the prior residence

Wallstreet Esq. :

According to NE law, as linked above,

Wallstreet Esq. :

she can argue that since she had no mental capacity when she moved to NE,

Wallstreet Esq. :

she could not intend to live in NE or move out of ND,

Wallstreet Esq. :

An individual’s domicile, once established, continues until a new, fixed, and permanent home is acquired. No change in domicile results from moving to a new location if the individual’s intention is to remain only for a limited time, even if it is several years. An individual declaring a change in residency must show an intention to establish a new domicile while he or she is physically present in the new location for other than a temporary purpose.

Wallstreet Esq. :

An argument used in similar cases,

Wallstreet Esq. :

is that she never or could have never intended to change her domicile, as the nursing home was not meant to be a permanent home, but temporary,

Wallstreet Esq. :

An argument made is that if she was better, she would have moved out back to ND

Customer :

She maintained ownership of ND farmland and other financial assets (investments) while she lived in the NE nursing home. ALL of these assets were included in the trust document whose mailing address was in Nebraska. How does that situation affect any possibility of paying Nebraska inheritance taxes?

Wallstreet Esq. :

If the mailing address of the trust is the only evidence of NE residency, but she had assets in ND,

Wallstreet Esq. :

and she never intended to make NE her permanent home, she has a strong argument under NE laws that she is not a state residence,

Customer :

It is my understanding ND residents pay no inheritance tax but NE residents do...so this matter has significant financial implications.

Wallstreet Esq. :

Nebraska tax law states the following:

Wallstreet Esq. :

An individual’s domicile, once established, continues until a new, fixed, and permanent home is acquired. No change in domicile results from moving to a new location if the individual’s intention is to remain only for a limited time, even if it is several years.

Wallstreet Esq. :

Yes, their is a major tax issue here, and I would hire an NE tax attorney to review the law to make sure you can avoid the tax, I can tell you this is a common situation, and in my review of the law and the facts, she never intended to live in NE permanently,

Wallstreet Esq. :

and has a strong argument, that her domicile never changed from ND, and since she has her home in ND, and other ties, the change of domicile and residency was never established

Customer :

Her ND house was sold 3 years ago. She then moved to various nursing facilities in ND for @1.5 years before transferring to a NE facility in order to be near her closest relative for her final 22+ months of life.

Wallstreet Esq. :

If she sold her home, and cannot argue that if she was better she would not have moved back to ND, than her domicile would be NE, since she decided to live their permanently.

Wallstreet Esq. :

The argument can still be made, but it is clearly harder if she cannot argue that she has some property back in ND that she would have moved to if she was better

Customer :

Her life-long intent always was to continue living in ND -- and eventually die in ND. All her friends, neighbors and relatives can easily attest to those wishes. In fact, during emotional discussions with her, she told me she would rather "die at home" than move to any care facility. The financial reality of all of this is the fact I had to sell her home in order to pay for her continued care and various nursing home residencies.

Wallstreet Esq. :

That is different than what you stated above,

Wallstreet Esq. :

You stated She then moved to various nursing facilities in ND for @1.5 years before transferring to a NE facility in order to be near her closest relative for her final 22+ months of life.

Wallstreet Esq. :

If it is the later proposition, than you can argue that her intention was to return and live in ND,

Wallstreet Esq. :

If you have any further questions please do not hesitate to ask

Wallstreet Esq. :

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