Domicile is the legal residence of a person or company and has significant implications in interpreting specific types of laws. It is important when a person moves or travels or when a company has holdings in multiple areas. Laws that apply to individuals are those in which their domicile is located. Domicile does not necessarily mean owning property and can change if a person establishes residence elsewhere. For businesses, domicile can be vital, as they may have to obey the laws of a specific region, even if they operate elsewhere.
In a legal sense, the domicile of a person or company is the place where he has established his legal residence. This could mean a state, country or other and has significant implications in interpreting specific types of laws. It is especially important when a person moves or travels or when a company might have holdings in more than one area. In most cases, the laws that apply to individuals are those in which their domicile is located and include laws relating to marriage, inheritance or commercial rights. Many criminal laws may not consider domicile, or federal governments may have the right to override state or provincial laws in some cases.
In most cases, no person or business has more than one legal residence at any given time. A permanent home is permanent until such time as the person decides to establish residence elsewhere. A person with a home in Texas has this as their domicile unless she decides to move to another location, such as New York, get rid of the Texas home, and become a legal resident of New York. Note that simply visiting New York, or even living there for a short time, such as to attend school, would not change your domicile under many circumstances.
The reason this concept is so important is because in many places the laws differ. Texas and New York inheritance laws may not be the same. Divorce laws in one or other of these states could be vastly different.
Generally, to make use of one of these laws, the issue of domicile must be decided first. A married couple visiting New York but residing in Texas may decide to divorce and should do so under Texas law, unless they establish residency in New York first. They cannot be residents of both states, even if they own property in both states.
Domicile does not necessarily mean owning property. The idea is more abstract than that. It could mean renting an apartment, staying with friends, or living in a shelter. It simply states that a person legally belongs to a specific area and is more subject to the laws of that area. Children, for example, who usually don’t own property, typically have legal residence with their foster parents. If the parents move and establish residence elsewhere, the residence status of the children also changes, which could lead to changes in the rights of the children to inherit.
For businesses, domicile can be vital, since most may have to obey the laws of a specific region, even if they operate elsewhere. Some companies in the United States tend to cluster in states where the laws are more generous towards them. Many credit card companies are based in places like New Hampshire because the laws tend to be more generous. In many cases, credit card companies’ major operations may take place elsewhere, but maintaining legal residence in a credit card-friendly state allows credit card companies to conduct their business in the most beneficial way for them.
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