At the risk of oversimplification, individuals looking to change domicile to another state must sever as many ties as possible with their current state to demonstrate that they have abandoned the current state. In many cases, however, individuals have long-standing relationships with nonprofits in their current state that they would like to continue after their change of domicile. Although "cocktail party wisdom" suggests it is necessary to stop making contributions to those nonprofits upon a change in domicile, the good news is that this generally is not correct.
Connecticut, New York, New Jersey and Massachusetts all specifically acknowledge that the making of charitable contributions shall not be considered a factor in determining domicile. Accordingly, individuals changing domicile can continue to make contributions to nonprofits they previously supported. The rationale behind these provisions is to allow nonprofits to retain the support of their historic donors. In the absence of such provisions, individuals likely would stop making contributions to nonprofits in the state they were leaving, to avoid potentially undercutting their change of domicile. If you are involved with a nonprofit organization, consider letting your donors know they may continue making contributions without any negative impact on their change of domicile.
The news is not quite as good, however, when it comes to continuing to serve on nonprofit boards. Of the four states mentioned above, only New York and New Jersey provide that the volunteering, giving or donation of uncompensated time to a nonprofit shall not be used to determine where an individual is domiciled. Unfortunately, neither Connecticut nor Massachusetts yet has such a provision, which leads us to advise clients they should resign from nonprofit boards in those states if they are changing domicile.
We intend to work with the Connecticut nonprofit community to propose a statute similar to New York's during the current session of the Connecticut legislature. If you know of a Connecticut nonprofit interested in joining a campaign to propose legislation regarding continued service following a change of domicile, please let us know.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
