Florida Trust & Probate Attorneys Blog
By Phillip B. Rarick, Miami Probate Attorney
Holding title to bank accounts, stock or other intangible property as Tenancy by Entireties or “TBE” is a limited but popular form of asset protection that has benefits – and traps.
Benefits of Holding Property as Tenants by Entireties
Holding property as TBE has certain benefits for married couples. Upon the death of one spouse, all assets flow to the surviving spouse without the need for probate. Holding property as TBE has significant asset protection benefits: such property cannot be reached by creditors unless both husband and wife are liable. If the property is held as TBE, and the creditor has a judgment against only one spouse, then the creditor cannot attack the TBE property.
Five Traps for Holding Property as Tenants by Entireties
1. You must be married. This form of ownership is available only to two persons in a legally recognized marriage. TBE is therefore not available to a gay or lesbian couple in Florida. Since Florida does not recognize common law marriage, TBE is not available to two persons living together regardless of the time of the relationship.
2. Assets held jointly before marriage. These assets do not automatically become TBE upon marriage. Such assets should be re-transferred from the spouses jointly to themselves as tenants by entireties after the marriage.
3. TBE assets can be attacked if both spouses are liable. As mentioned above, if a creditor has a judgment against both spouses, then the creditor can reach TBE property. Further, if one spouse dies, the TBE protection is lost, and the surviving spouse’s assets can be reached by creditors.
4. Creating the account. If one spouse is the owner of a bank account, do not just add the other spouse’s name to the account. Open up a new account in joint name of the two spouses.
5. Check your bank signature card. If you and your spouse open a bank account at the same time, Florida law provides a legal presumption that the account is held as tenants by the entireties. However, if the bank officer checked a box on the card indicating contrary title when opening the account, such as “Joint Tenants With Right of Survivorship”, then the account will be held as indicated on the card. The take-away point here is this: check your bank signature cards for all accounts held in joint name with your spouse.
Conclusion
Tenancy by the entireties ownership can be a useful form of ownership in Florida. However, there are numerous traps. There are stronger and safer forms for asset protection that are available in Florida with proper planning. In order to best protect your hard earned wealth, it is advisable to periodically review how you hold title to all your assets by a Florida attorney experienced in estate and asset protection planning.
Special Note
The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an attorney that is experienced in Florida estate planning law. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.