Help! I’m a Digital Nomad, Where Am I Supposed to Get an Estate Plan?
Domicile and Full-Time Travel for Estate Planning Purposes
I’ve said it before, and I’ll say it again. Everyone over the age of 18 needs an estate plan. And, you should get that estate plan completed by a reputable, licensed attorney in your jurisdiction. But, what if you travel full-time, where is your residence? How do you know where to get your estate plan if you are a digital nomad.
(Disclaimer: I am an attorney, but I am not your attorney. Nothing in this site creates an attorney-client relationship. This article is for educational purposes only and should not be used as legal advice. Always consult with your own attorney as your own personal circumstances dictate the legal advice that is right for you.)
Digital Nomads and Full-Time Travel
The internet has made our world a much smaller place. Now, I can speak with people all over the world screen-to-screen in a matter of moments.
Further, after a global pandemic, the benefits and ease of remote work have become more and more profound.
Life on the road, at home, or around the world is becoming more and more popular.
Thus, the rise of digital nomads.
What’s a Digital Nomad?
The term digital nomad refers to a person who works almost exclusively online and lives a transient lifestyle traveling from state to state, city to city, or even country to country.
With just an internet connection and a backpack, someone can see the world from the comfort of a beach front cabana all while keeping connected to clients, work products, or production teams.
Even my family took a family sabbatical without my husband ever missing a beat at work. As short-term digital nomads, we were able to travel the world with our family and keep working so long as we had a reliable internet connection.
Related Post: Family Sabbatical
Some people have also taken to full-time travel. #VanLife has grown in popularity over the last few years, and even retired folks are ditching the family home in favor of a home on wheels.
All of these newly developed lifestyles are challenging the traditional notions of domicile and residence for estate planning purposes.
What is Domicile for Estate Planning?
In law school, we spend a great deal of time discussing the difference between domicile and residency. Basically, residence is where you live, but domicile is where you intend to make your home.
In other words, you might have a vacation home in Costa Rica, but your home –where you pay your taxes, send your mail, keep your pets– is in Indiana/Ohio/Virginia/Tennessee…wherever you actually live. At the time of your vacation, your residence is Costa Rica, but your domicile is your home state.
If you travel full-time or are a digital nomad, you might pride yourself at having only temporal residences while not having a domicile at all.
However, you still need an estate plan.
Why do nomads need an estate plan?
Just to be clear, in case your first response was: “I don’t need an estate plan,” you most certainly need an estate plan.
Remember, an estate plan is not just a will to dispose of assets but also personally curated documents that provide for your personal health and financial decisions in the event of a calamity where you are unable to care for yourself.
Did you fall off a cliff in the Philippines and need someone to access your online bank account to pay your medical bills while you are in a coma? Are you temporarily off-grid and need someone to file your taxes?
These actions require powers of attorney and advance directives to provide for your dignity, care, and continuity of business. Powers of attorney are part of a well-rounded estate plan. Not to mention these documents are part of a responsible business plan.
RELATED POST: What is an Estate Plan?
That estate plan should include, at a minimum:
- A Last Will and Testament
- Health Care Power of Attorney
- Advance Directive or Living Will
- Financial Power of Attorney
Most likely, I would recommend a few more documents if you have minor children, have assets in multiple states or countries, or even if you have a business interest.
RELATED POST: Does my digital business need an LLC?
Why Does Domicile Matter for Estate Planning?
Knowing where your domicile is for purpose of estate planning is important because it determines the law that applies to your person and your property.
Each state in the USA has different rules, regulations, laws, and practices that determine what happens to your stuff if you die.
Delaware is known for being very accommodating to businesses, North and South Dakota are known for being very accommodating for transferring generational wealth, and Tennessee is a favorite because it has no personal income tax.
Basically, where you live, die, or keep your stuff determines what treatment your stuff will have. Your domicile determines the law that applies to your stuff.
For example, Indiana allows the use of transfer on death deeds for transferring real property, while Florida does not. Thus, you can easily avoid probate in Indiana, but would need an altogether different approach in Florida.
These are the kinds of differences and nuances that you won’t find in an online estate plan generator.
Online Estate Planning for Digital Nomads
While you might be tempted to simply enter “online estate plan” into your search engine of choice, keep in mind that you, as a full-time traveler or digital nomad have a variety of unique issues to consider.
Not the least of those issues is the fact that you hold online accounts. Those online social media, bank, or financial accounts are subject to multiple vendor rules. Your online bank likely has different rules than a traditional brick and mortar building. An estate planner will grant specific digital access rights.
While online estate planning is incredibly popular especially among young people, online print-your-own-documents rarely come with the personalized care and analysis that meeting with a reputable estate planning attorney will provide.
Meeting with an attorney allows you to go over the different nuances of your career, hopes, aspirations, career, and, of course, domicile. Further, an attorney will be able to decide which documents or types of documents apply to you.
For example, if you simply download a power of attorney from your online form generator, you might get a health care power of attorney, property power of attorney, or a combined power of attorney.
RELATED POST: Types of Powers of Attorney
One, the other, or multiple of those might be right for you depending on whether you own real estate, value the privacy of your health information, or want to appoint multiple attorneys-in-fact.
In short, simply going to an online form generator is not a solution that I recommend.
So, again, you need a reputable attorney in your jurisdiction. But, where is your jurisdiction? Where is your domicile?
Where is domicile for a digital nomad?
Again, this brings us back to the question of where your domicile is for a digital nomad.
To determine domicile, we want to consider both your actual contacts to a location and your state of mind.
Where do you intend to live, stay, pay taxes, raise a family? If you spend 8 months of the year in a single location, where you intend to stay for the foreseeable future, then that is your domicile.
However, if you are truly a full-time traveler without any real estate or real property, then we want to look to a list of factors.
Full time #VanLife or full-time RV travelers should consider:
- Where their van/RV is titled,
- Where they pay taxes and insurance for the van/RV,
- Where their license is registered,
- Where their mail is forwarded,
- Where they keep cell phone service,
- where they bank, and
- Where they keep investment accounts.
If your license, registration, insurance, and mail all correspond to the same state or locale, then that is likely your domicile for purposes of an estate plan.
Further, if your bank account, retirement account, taxes, and bills all correspond to the same state, then that is likely your domicile.
Digital nomads, on the other hand, want to consider some of the same factors plus a few others:
- Where is their business registered?
- What is their mailing address?
- In what state do they pay taxes?
- What is your mailing address for bills, payments, fees, bank registration, etc.
- Where do you land between travel gigs?
- Where do you spend important holidays?
- Where do you intend to live after you stop traveling?
- What state is your 1099 or other income statement issued?
If some or most of these are the same, then that is likely your domicile.
Domicile, Estate Planning, and Untethered Life
If you are living life untethered, whether as a digital nomad or a full-time traveler, then you don’t meet the traditional criteria for domicile.
However, your domicile still matters because your domicile determines the treatment of your stuff and your person at your death or incapacity.
Determining your domicile if you are a digital nomad or full-time traveler requires a look at a lot of different factors.
Meeting with a reputable attorney competent to deal with your specific situation is incredibly important in your estate planning process.