Asset Protection For Married Couples: Tenants By Entireties

Many states have tenants by entireties protection, though the types of property covered and the eligible relationships between tenants vary from state to state. In Florida, tenants by entireties must be married couples (no other relationships qualify), and the property that can be protected includes both real property (real estate) and other tangible or intangible personal property, which is excluded in most other states with entireties protection. There are some other qualifying factors under Florida law:

  • The tenants must have been married at the time the acquired the property
  • The tenants’ interest in the property has to have begun simultaneously and originated with the same instrument
  • Parties must have equal interest in the property
  • The property has to be under joint ownership and control
  • When one spouse dies, the survivor will retain ownership of the property

Great. What Does All That Mean?

 These rules have a lot of potential consequences, both favorable and unfavorable, so it’s important to understand how they could affect your own situation. For example, if you and your spouse open and maintain a joint bank account while you are married, Florida law will assume that it is covered under tenancy by entireties law, unless there is some evidence to contradict this. If, however, one or both of you have bank accounts that you opened before the marriage, these accounts will not meet the qualifications, and will be considered separate property as far as asset protection goes. Closing those accounts and opening new, joint accounts after marriage will create tenants by entirety ownership.

Adding your spouse’s name to the title of a property you owned before you got married will not create tenants by entireties ownership. [Will refinancing such a property in both spouse’s names satisfy the requirements? Following assumes it does] Refinancing real property that one spouse owned before marriage creates a new instrument, simultaneous acquisition, and equal interest, which allows the property to be held by both spouses under tenants by entireties ownership.

What Kind Of Protection Does Tenancy By Entireties Provide?

Property owned by a married couple under tenants by entireties protection cannot be considered when a creditor is trying to collect on a judgment against one of the spouses. This does not apply when the tenants are jointly in debt to a creditor. If the creditor gets a judgment against one spouse as an individual, the property covered under tenants by entireties cannot be seized involuntarily. If a creditor gets a judgment against both spouses, the property can be seized involuntarily to settle the judgment.

In cases of divorce or the death of one spouse, assets that were formerly protected may become vulnerable to judgment creditors, depending on the circumstances. Entireties assets are also treated differently than other assets in bankruptcy; they’re not subject to the 2-year residency requirement for exemption, but they are only considered exempt when one spouse files bankruptcy individually, and there are no joint unsecured debts between the couple.

Reliable Advice On Tenants By Entireties Ownership & Protection

Entireties ownership and protection is a complex matter, and one you want to make sure you have correctly established before you need the protection it can provide. The experienced attorneys at Overstreet, Miles, Cumbie, Finkenbinder & Bondy will work with you to ensure that your property is held in the way that provides you and your spouse the best possible asset protection. Call or contact us online to schedule a confidential consultation.