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Post Info TOPIC: Kentucky Domicile


RV-Dreams Community Member

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Kentucky Domicile


I left New Mexico with a disabled wife in 2011 for full time RVing heavily influenced by RV-Dreams.com with no regrets.  Wife passed in 2014 and full timed until Hurricane Harvey took me out last year.  I ended with a Texas Residency and I have worked here for three years.  I am accepting a position with Blue Grass Army Depot the first of the year and moving back to the Richmond, Ky area.  I have been trying to discover analyze the ins and outs of retaining Texas Residency vs. re-obtaining KY residency where I was born and raised.  Property tax is 6.5% compared to Kentuckys 6%.  I don't know how health insurance will come into play.  I guess I could have dual residence with Texas as my domicile.  The Job may only last 3-5 years if we successfully clean up the weapons.  Any advice or unknown legal traps at play in my thinking.  I can handle the cost of an out of state fishing lisense.



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Parrish,

If you are going to be moving to Kentucky and residing in the state for 3 -5 years, your question is basically moot. For tax and legal purposes you will be likely be deemed to be domiciled in Kentucky based on physical presence and significant contacts with the state. In order to keep Texas as your domicile, you would have to be able to demonstrate an clear intent to return and back that up with proof which is not an easy thing if you've picked up your life and moved to another state for 3 - 5 years. If you retain real estate in Texas, you would have a better case, but even then it might not be enough.

Between Kentucky and Texas, there are a few differences.

Kentucky has an income tax on wages while Texas does not. However, even if you attempted to retain Texas as your domicile, you would still pay Kentucky income taxes on all income earned in Kentucky. Trying to avoid Kentucky state income taxes by claiming you are a Texas resident won't work. 

Kentucky has personal property taxes on the value of vehicles while Texas does not. As vehicles age and the value goes down so do the taxes, and annual registration fees in Kentucky aren't too bad.

Both Kentucky and Texas have real property taxes (taxes on real estate owned), but Kentucky's effective rate is lower than Texas. You didn't say if you were buying a house or renting. If you are renting, then the real property taxes wouldn't affect you. If you are buying, the tax rates depend on location (city, county, schools, etc.) and the house value, but they should be quite reasonable in Richmond.

You'll just have to get more information on health insurance, but generally Kentucky's rates are lower than many other states.

Legally, if you have a will, it will be recognized under Kentucky law IF it is valid in the state in which it was written. However, probate can take a good deal longer as Kentucky would have to go through the extra steps of proving the will was valid in the state written. It goes better if the will is re-drafted in the state of domicile.

Personally, I wouldn't mess with trying to be a dual resident. The only reason that I can see to retain Texas would be to not have to pay state income taxes, but as I discussed at the beginning, you will have to pay Kentucky income taxes on the income you earn in Kentucky anyway.

 

 



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RV-Dreams Family Member

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What Howard said, you really don't have a choice in the matter. I've got my CPA hat on here. If you want to avoid probate you can likely form a living trust and put most of your valuable assets it. Since I am not a Lawyer you would need to consult with someone' like Howard, who is, but it is a solution that kept my mom's estate (really her trust) out of court and it was substantially settled shortly after her death. Just something that worked for me. As always YMMV.

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RV-Dreams Family Member

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I agree with Howard that most states will honor a will made in another state that is properly written and executed. California does and has a specific statute regarding this issue. However, property laws differ from state to state. This includes community property vs. common law and what "automatically" goes to the surviving spouse. The advice is simple: See an estate planning attorney in the state where you reside.



-- Edited by LarryW21 on Thursday 20th of December 2018 10:52:13 AM

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Winnebago TT 2101DS & 2020 Silverado LTZ Z71. 300 watts WindyNation solar w/MPPT, 2 Trojan T-125s. TALL flag pole. Prefer USFS, COE, BLM, USF&WS, NPS, TVA, state/county camps. 14 year Army vet-11B40 then 11A - old MOS 1542 & 1560.

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