Canada: Home Is Where The . . . . Domicile Is?

Born in Vancouver, raised in Toronto, educated in New York, graduate degree from England, first job in Hong Kong, transferred to Tokyo, retired in the Cayman Islands.

In our increasingly mobile world, it is not uncommon for a person to have lived in multiple jurisdictions throughout their lives. Educational and career opportunities can often take someone from one country to another, accumulating assets in many locations. In this era of the global citizen, when was the last time you asked yourself: what is my domicile? More likely than not, the answer is never. However, a recent decision of the British Columbia Court of Appeal suggests it may be time you did. The answer could have important implications on your estate planning, or even the validity of your will.

"Domicile" refers to the place where you are deemed to have your permanent home and determines what law will apply to you in certain situations, including the formal validity of your will and the distribution of property (excluding real estate) under your will. While it is possible to have multiple residences, you can only have one domicile. In Canada, domicile is provincial. You are domiciled in a particular province or territory, not in Canada as a whole.

In Sato v Sato, 2018 BCCA 287, the Court of Appeal found that because the deceased, Hiroyuki Rex Sato, was domiciled in British Columbia at the time of his second marriage, his will had been revoked and his estate passed on intestacy. Under the provisions of B.C.'s former Wills Act, RSBC 1996, c 489, ss 14 and 15, marriage automatically revoked a will (although it is no longer the case under the new Wills, Estates and Succession Act, SBC 2009, c 13, which came into effect on March 31, 2014).

Mr. Sato immigrated to Canada from Japan in 1969 and maintained both Canadian and Japanese citizenship. During his career in banking, he lived and worked in Toronto, Vancouver, the Cayman Islands, Tokyo and Guernsey, before settling in Luxembourg in 2009. Mr. Sato executed his will in B.C. in 2011, leaving the bulk of his estate to his two sisters equally. In 2013, while residing in Luxembourg, Mr. Sato met and married Makiko Sato. Mr. Sato died in March 2015.

The issue before the Court was whether Mr. Sato was domiciled in B.C. at the time of his marriage in 2013. If he was domiciled in B.C., the marriage revoked his will, and his estate would pass to his widow on intestacy. If Mr. Sato was domiciled in Luxembourg (or elsewhere), his will remained valid, and his estate would pass to his sisters.

There are two factors relevant to establishing domicile: (1) where you reside; and (2) the intention to reside there indefinitely. In Sato, both parties agreed that Mr. Sato resided in Luxembourg. He lived and worked in Luxembourg; all of his personal possession were there; his friends were there; and he filed taxes in Luxembourg. However, the Court found that Mr. Sato did not intend to reside in Luxembourg indefinitely. This finding was primarily based on a CRA tax residency determination form he completed while working in the Cayman Islands in 1999. On the CRA form, Mr. Sato indicated that he intended to retire in Canada.

The Sato decision highlights the fact that your domicile can have a significant impact on your estate. An expression of intent to settle somewhere other than your current residence may be sufficient to rebut the presumption that a person's place of residence and domicile are the same. Individuals with assets in multiple jurisdictions are encouraged to talk to an estate planning professional about these issues.

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.