Entireties
Both spouses must acquire their ownership interest in an entireties asset at the same time during their marriage. Adding a spouse to an account or asset title you had prior to your marriage will not create tenants by the entireties ownership or protection.
Asset Protection Of Tenants By Entireties Property
In the case where both spouses are jointly indebted to a particular creditor, that creditor can involuntarily seize tenants by the entirety property. Tenants by the entireties protection exists only if a creditor has a claim against only one of the spousal owners. A 2011 Florida case pointed out that a lender may violate federal lending laws if it demands a spouse’s signature on loan documents to avoid future entireties protection if the applicant spouse is creditworthy.
Most states with entireties protection afford the protection only to real property. In Florida, unlike most other states, all types of property — including all real property, tangible personal property, and intangible personal property — may be owned by a married couple as tenants by the entireties. Whether a married couple owns property as unprotected joint tenants with survivorship or as protected tenants by the entireties depends on the intent of the spouses.
The Florida Supreme Court has said that any real or personal property owned jointly by a husband and wife is presumed to be owned as tenants by the entireties.
Additionally, Section 655.79 of the Florida Statutes says that any bank account owned by husband and wife is presumed to be a tenants by entireties account unless there is clear and convincing evidence of their contrary intent. A creditor could rebut this presumption of entireties bank accounts by showing that the property ownership does not possess all six entireties characteristics or that the husband or wife indicated an intent to own the property in some other manner. Incorrectly filling out financial applications is the most common error resulting in a legal disclaimer of entireties protection.
In Florida, tenants by the entireties is the quickest and simplest asset protection for married persons. This form of ownership, however, may not provide secure asset protection over the long term. First, a divorce between the spouses immediately converts the tenants by the entireties ownership into a joint tenancy between the former spouses. In that case, the assets of the debtor spouse would immediately be exposed to his or her creditors. Likewise, a death of one spouse terminates tenants by the entireties and vests the property solely in the surviving spouse. If the surviving spouse has creditors, the asset protection afforded by the tenants by the entireties ownership is lost. Secondly, tenants by the entireties ownership creates issues for estate planning and interferes with estate tax avoidance.
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