In Florida, the concept of tenants by the entirety offers a unique form of property ownership available only to married couples. This legal doctrine provides significant benefits and protections, especially when it comes to asset protection and estate planning. Understanding how tenants by the entirety works in Florida is crucial for married individuals looking to safeguard their jointly owned assets from creditors and simplify the transfer of property upon death. Unlike other forms of ownership, tenants by the entirety comes with distinctive rights that impact how property is handled during the marriage, in legal disputes, and after the death of a spouse.
What Is Tenants by the Entirety?
Tenants by the entirety (TBE) is a form of joint property ownership available to married couples. In Florida, it can apply to both real property (such as a home) and personal property (such as bank accounts). When property is held as tenants by the entirety, it is legally considered to be owned by the marital unit, not by the individuals separately.
Legal Requirements in Florida
To establish tenants by the entirety ownership in Florida, the following six unities must be present:
- Unity of Possession: Both spouses have equal rights to possess the property.
- Unity of Interest: Both spouses own an equal interest in the property.
- Unity of Title: The property is acquired under the same title document.
- Unity of Time: Both spouses obtain their interest at the same time.
- Unity of Marriage: The couple must be legally married when the property is acquired.
- Intent to Create TBE: There must be intent to hold the property as tenants by the entirety.
In Florida, there is a presumption that property acquired by a married couple is held as tenants by the entirety unless expressly stated otherwise.
Benefits of Tenants by the Entirety
Creditor Protection
One of the most significant advantages of tenants by the entirety in Florida is creditor protection. If only one spouse is sued or has a judgment against them, creditors generally cannot seize property held as TBE. This is because the asset is owned by the marital unit, and both spouses must be liable for the debt for a creditor to access the property.
Automatic Right of Survivorship
Tenants by the entirety includes a right of survivorship. This means that when one spouse dies, the surviving spouse automatically owns the entire property. There is no need for probate proceedings to transfer ownership, which simplifies estate management and helps avoid legal delays and costs.
Ease of Transfer and Maintenance
Because TBE treats the couple as a single legal entity, decisions regarding the property often require joint consent. This ensures mutual involvement in major transactions and helps avoid disputes over ownership rights. It also makes it easier to manage shared financial accounts, real estate, or investments.
Tenants by the Entirety and Divorce
If a married couple divorces, tenants by the entirety ownership automatically converts to a tenancy in common, unless the divorce settlement specifies otherwise. In a tenancy in common, each former spouse owns a separate share of the property and can transfer or sell their portion independently.
Implications of Divorce
Upon divorce, the special protections and rights of TBE are lost. Creditors can then pursue the separate interest of either former spouse, and the property is no longer protected under the same legal framework. It is important for divorcing couples to review and update all jointly held property arrangements during their legal proceedings.
Application to Personal Property
In Florida, tenants by the entirety is not limited to real estate. Personal property such as vehicles, bank accounts, and investment accounts can also be held under TBE if they meet the six unities. Many financial institutions in Florida allow spouses to open joint accounts as TBE, offering the same creditor protections and survivorship rights as real property ownership.
How to Ensure Personal Property Is TBE
To ensure personal property is properly titled as tenants by the entirety, couples should:
- Clearly indicate their marital status when opening accounts or purchasing assets.
- Use the specific designation tenants by the entirety when titling the asset.
- Confirm with financial institutions that they recognize and support TBE titling.
Exceptions and Limitations
While tenants by the entirety provides strong protection, there are exceptions. If both spouses are liable for a debt, creditors can pursue TBE property. Additionally, not all financial institutions recognize TBE, especially those outside of Florida or unfamiliar with state-specific laws. In such cases, couples may need legal assistance to ensure their property is properly titled and protected.
Federal Tax and Bankruptcy Considerations
In bankruptcy proceedings, whether TBE property is protected can vary. Florida’s laws generally protect TBE property if only one spouse files for bankruptcy, but federal bankruptcy courts may scrutinize the nature of the ownership, particularly in joint debt situations. Likewise, in estate tax situations, federal law may not always fully recognize TBE distinctions, especially for high-value estates.
Estate Planning and Tenants by the Entirety
Because of the right of survivorship, TBE simplifies estate planning. However, couples should still create wills and consider other estate planning tools to address scenarios where both spouses die at the same time or to handle distribution of property beyond jointly held assets.
Additional Planning Tools
Some estate planning tools that can complement tenants by the entirety include:
- Revocable living trusts
- Durable powers of attorney
- Health care directives
- Payable-on-death designations
How to Establish Tenants by the Entirety in Florida
To ensure property is held as TBE, couples should follow clear steps when acquiring assets:
- Make the purchase in both names as a married couple.
- Use correct language in the deed or title specifically referencing husband and wife or tenants by the entirety.
- Work with attorneys or title companies familiar with Florida real estate law.
For existing accounts or property, couples can often re-title the asset or execute a new deed or agreement that reflects tenants by the entirety ownership.
Florida’s tenants by the entirety law provides a valuable form of ownership for married couples, offering benefits such as creditor protection, survivorship rights, and simplified estate planning. By understanding how TBE works and properly titling both real and personal property, spouses can protect their assets and ensure a smoother transition in the event of death or legal disputes. Whether opening a bank account or purchasing a home, Florida couples should consider the advantages of tenants by the entirety and take the necessary legal steps to establish and maintain this form of ownership.