Change of Residence

April 13, 2006

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When executing an overall asset exemption plan, a change of residence may be a prelude to a conversion of assets into an exempt form. A change in residence can be very effective, because individuals can always claim their state's exemptions, in or out of bankruptcy, and because states vary widely in terms of the exemptions they offer (see the exemptions list for details on state-specific information).

While states often have residency requirements (usually six months to a year) with respect to divorce or voting, most are silent on the issue of establishing residency for purposes of claiming asset exemptions. In most cases this is not an issue because it usually arises in a bankruptcy action. There, the federal bankruptcy code controls, which establishes a two-year residency requirement.