What Creditors Should Know About Florida’s Tenants By The Entireties Doctrine
Unlike in community property states, such as California and Arizona, where creditors can obtain judgments and levy on personal property owned by one spouse for debt incurred by the other spouse, Florida property can be owned as tenants by the entireties. Under Florida’s tenants by the entireties doctrine, personal property acquired while married by both spouses is presumed to be owned by the married couple as a whole, which is a separate and distinct unit.
Because of this distinction, unless a judgment creditor has a judgment against both spouses, with certain exceptions, it can be challenging, but not impossible, to execute on Florida property presumed to be held as tenants by the entireties.
Florida property can be held as tenants in common, joint tenants with or without rights of survivorship, and as tenants by the entireties. According to the Florida Supreme Court:
[P]roperty held as a tenancy by the entireties possesses six characteristics: (1) unity of possession (joint ownership and control); (2) unity of interest (the interests in the account must be identical); (3) unity of title (the interests must have originated in the same instrument); (4) unity of time (the interests must have commenced simultaneously); (5) survivorship; and (6) unity of marriage (the parties must be married at the time the property became titled in their joint names).
Beal Bank, SSB, v. Almand and Associates, 780 So. 2d 45, 52 (Fla. 2001). The key difference between property held as joint tenants and tenants by the entireties is that a couple must be married when the property was acquired. A tenancy by the entireties may exist in both real and personal property. Id. at 53 (citing Bailey v. Smith et al., 103 So. 833, 834 (Fla. 1925).
Judgment creditors regularly garnish and/or attach judgment debtors’ bank accounts. In Florida, “a presumption arises that a bank account titled in the names of both spouses is held as a tenancy by the entireties as long as the account is established by [the two spouses] in accordance with the unities of possession, interest, title, and time with right of survivorship.” Almand and Associates, 780 So. 2d at 59.
Therefore, the burden is on the judgment creditor to prove that a bank account owned by two spouses is not held as tenants by entirety. They key is making this determination is establishing when the bank account was opened. If the bank account was opened before the couple married, the bank account is held as a joint tenants and maybe subject to execution.
There are many cases where a judgment creditor or bankruptcy trustee attempted to levy and/or force turnover of personal property claimed as tenants by the entireties. In Cacciatore v. Fisherman’s Wharf Realty Limited Partnership, 821 So. 2d 1251 (Fla. 4th DCA 2002), the husband’s judgment creditor sought turnover of shares of stock titled in the names of the husband and wife. The appellate court found that a rebuttable presumption arose that the shares of stock were owned as tenants by the entireties. Id. at 1254.
In In re Kossow, 325 B.R. 478, 486 (Bankr. S.D. Fla. 2005), the bankruptcy court held that personal household furnishings acquired after marriage were held as tenants by the entireties and were not subject to turnover to the bankruptcy estate. Lastly, in In re Newcomb, 483 B.R. 554, 559 (Bankr. M.D. Fla. 2012), the bankruptcy court held that a rebuttable presumption exists that a married couple’s joint tax refund is held as tenants by the entireties.
Motor vehicles and watercraft are an exception to the bright line rule that a presumption exists that personal property owned by spouses is held as tenants by the entireties. If a motor vehicle or watercraft is titled in the names of the spouses with the conjunction “or” as opposed to the conjunction “and”, the motor vehicle or watercraft, despite the parties’ intent, is held as joint tenants and a judgment creditor or bankruptcy estate maybe entitled to a minimum of a ½ share in the motor vehicle or watercraft.
In the case of In re Daniels, 309 B.R. 54, 60-61 (Bankr. M.D. Fla. 2004), pursuant to Section 319.22, Fla. Stat., a motor vehicle titled in the name of the husband or the wife created a joint tenancy, not a tenancy by the entirety, and was therefore subject to turnover to the bankruptcy estate. In re Caliri, 347 B.R. 788, 798-799 (Bankr. M.D. Fla. 2006), the bankruptcy court held that jet skis titled in the name of the husband or his wife, pursuant to Section 328.01(3)(d)(2), Fla. Stat., were held as joint tenants, and thus were subject to turnover to the bankruptcy estate.
Gill Law Firm has been in business almost twenty (20) years and focuses primarily on commercial debt recovery, small business and nonprofit startups. Contact Wayne Gill at email@example.com or by phone at (561) 454-0301.
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