Home' Island Sun : ISN 011516 Contents 9B
ISLAND SUN - JANUARY 15, 2016
From time to time, clients will visit with me convinced that
he or she has protected their assets from the claims of
creditors by placing all of their assets and properties in
a joint tenancy known as Tenants By The Entireties. When
a married couple owns assets jointly as “husband and wife”
they are owning the assets as Tenants by the Entireties. This
is a popular but limited form of asset protection that has its
benefits – and traps.
First, let’s review the three different forms of joint ownership.
They are Tenants in Common (TIC), Joint Tenants with Rights of
Survivorship (JWROS) and, as mentioned above, Tenancy by the
Tenants in Common is an undivided interest of joint ownership. This means that
each party has the right to alienate, or transfer the ownership of, her ownership inter-
est. This can be done by deed, will or other conveyance. When one joint owner dies,
their interest is subject to probate.
In contrast, owning assets or property jointly with rights of survivorship avoids the
probate process, but is similar to TIC in that either party can individually alienate or
transfer his interest. When this happens the asset is owned as TIC.
Individuals owning assets or property as tenants by the entireties cannot alienate or
transfer without the consent and signature of the other.
Now that you understand the different forms of joint ownership, let’s review the
benefits of TBE. Holding assets as TBE has certain advantages for married couples.
When one spouse dies, the surviving spouse owns all the assets without the need for
probate. Creditors of only one spouse cannot reach the assets, as both husband and
wife must be liable for a creditor to successfully attack the assets.
But there are traps for the unwary when relying on TBE for asset protection pur-
poses. Allow me to present to you the top five.
1. You must be married. TBE is only available to those in a legally recognized
marriage. Even if a couple who is not legally married titles assets or property as ten-
ants by the entireties, they will not be afforded the asset protections enumerated under
2. Assets held jointly before marriage do not automatically become TBE upon
marriage. The assets must be re-titled from one of the spouses to them jointly as ten-
ants by the entireties after the marriage to achieve TBE status.
3. TBE assets can be attacked when both spouses are liable. If a creditor
has a judgment against both spouses, then the creditor can reach TBE assets. This can
happen when one spouse causes a terrible car accident when both spouses own the
car involved in the accident. Further, if one spouse dies or the marriage ends in the
middle of a creditor problem, the creditor will be able to attack the TBE property.
4. The account must be created properly or the protection is lost. When
one spouse owns a bank or brokerage account, for example, and simply adds the
other spouse’s name as TBE, it will not be considered TBE property. There is a rule
that TBE assets and property must be created with four “unities” – those of time, title,
interest and possession. Therefore, the proper way to create a TBE account that is
currently owned by only one spouse is to close the account and open a new account in
both spouses’ names as TBE.
5. Joint with Rights of Survivorship is not TBE. While Florida law presumes
TBE ownership between a husband and wife when opening a bank account, if the
bank officer checked a JWROS box on the account application then that will trump
the TBE presumption and protections. Therefore bank and brokerage signature cards
should always be checked to assure TBE ownership and protections.
There are additional issues surrounding TBE property, particularly in second mar-
riage situations where there is a nuptial agreement that defines non-marital property
that should not be subject to the other spouse in a divorce proceeding. Further, if your
estate plan contemplates assets in one spouse’s name or the other’s (including owner-
ship in a revocable trust), then it is important to consider the estate planning ramifica-
tions of any transfer of ownership.
As one can readily see, there are many considerations when opening up bank and
brokerage accounts or titling real estate into joint name, and they are not to be taken
©2016 Craig R. Hersch. Learn more at www.sbshlaw.com.
Five Dangers Of Holding Assets
And Property As Husband And Wife
by Craig R. Hersch, Florida Bar Board Certified
Wills, Trusts & Estates Attorney; CPA
Read us online at IslandSunNews.com
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