According to the estate plan set up by Joan Rivers through her will, she was officially a resident of New York before she passed away. That would mean that the laws in New York would usually have to apply to her estate, and it would be taxed at a full 16 percent. However, Rivers apparently set up some provisions to get away from that high tax rate.
Namely, she said that the state that she planned to live in -- officially known as her "state of domicile" -- was California. If she was there when she passed away, she wanted to use the laws from California to govern her estate, rather than those from New York. This could give her a tax break.
It may not have been intended to have anything to do with taxes, as her lawyer has not commented on the situation. Instead, it could just be a realistic situation created by the fact that Rivers spent a lot of time in New York and California, doing business on both coasts. As is easy to see, this is something that big celebrities do often.
However, there is also a good chance that she intended it to be set up that way so that the estate taxes would not take as large of a portion out of her wealth and assets when she passed away.
If you are setting up your estate plan -- something that you may want to do well before you reach the age when you think you may need it (Rivers was 81 years old) -- you need to make sure you know all of the legal ramifications.
Source: Investment News, "Joan Rivers' estate planning gambit: A New York state of residence" Darla Mercado, Dec. 11, 2014