04/26/2021
There are â6 unitiesâ that must exist for ownership to be held as tenants by the entireties. They are:
1. Unity of Possession â Both spouses have joint ownership and control. With respect to a bank account, it may be acceptable that a deposit agreement allows either spouse to withdraw independently of the other on the theory that the power to withdraw is an expression of an authority of agency given by each spouse to the other.
2. Unity of Interest â Each spouse has the same interest in the account â it is not a problem if one spouse deposits all or most of the funds into the account as long as each spouse has the same interest immediately after the deposit.
3. Unity of Time â The interests of both spouses in the account must originate simultaneously in the same instrument, such as on the signature card. Spouses should not try to convert an individual ownership into a tenantâs by the entireties by âaddingâ the second spouse to the account or property. Instead, the asset should be transferred into a new account or titling arrangement that allows for the interest of both spouses to be created at the same time and in the same instrument.
4. Unity of Title â Spouses must have ownership under the same title.
5. Survivorship â On the death of the first spouse to die, the surviving spouse becomes the sole owner of the entiretiesâ property. A general power of appointment over jointly owned assets, given to one spouse by the other spouse, will vitiate tenancy by the entirety status.
6. Unity of Marriage â The parties must be married at the time the property is titled in their joint name. Only spouses enjoy the protection of tenants by the entirety ownership. If there is any ownership interest in the property by a third party, there is no tenancy by the entirety.
Although tenants by the entirety requires that the couple be married, a married couple can also own property as joint tenants, with right of survivorship. When property is held as tenants by the entirety, only the creditors of both the husband and wife, jointly, may attach the tenants by the entirety property; the property is not divisible on behalf of one spouse alone, and therefore it cannot be reached to satisfy the obligation of only one spouse. If asset titling of property is held as a joint tenancy with right of survivorship, a creditor of one of the joint tenants may attach the joint tenantâs portion of the property to recover that joint tenantâs individual debt.
Prior to the Florida Supreme Courtâs decision in Beal Bank v. Almand and Associates, 780 So.2d 45, 53 (Fla. 2001), when a married couple took title to real property, it was presumed under the law that title was as tenants by the entireties. For personal property, the presumption was not present. Beal Bank modified the law regarding the presumption of title with respect to married couples acquiring title to personal property. In Beal Bank, the Court said: âwe conclude that stronger policy considerations favor allowing the presumption in favor of a tenancy by the entireties when a married couple jointly owns personal property.â Id., at page 57. The Supreme Court went on to say: âaccordingly, we hold that as between the debtor and a third-party creditor (other than the financial institution into which the deposits have been made), if the signature card of the account does not expressly disclaim the tenancy by the entireties form of ownership, 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 husband and wife in accordance with the unities of possession, interest, title, and time and with right of survivorship. The presumption we adopt is a presumption affecting the burden of proof pursuant to section 90.304, Florida Statutes (2000), thus shifting the burden to the creditor to prove by a preponderance of evidence that a tenancy by the entireties was not created. [Footnotes omitted.] Id. at page 58.
The effect of Beal Bank is to allow married couples greater protection from the creditors of one of the spouses where they have personal property owned by them jointly. With respect to bank accounts at least, the presumption is that an account owned by husband and wife is owned as tenants by the entireties, unless is specifically states that they do not own the account as tenants by the entireties. With respect to other forms of personal property, it is important that the asset titling documents for the property specifically state that the property is owned as tenants by the entireties, or that at least it does not specify some other form of ownership, such as joint tenants with right of survivorship.
Notwithstanding the Beal Bank case, married couples should be extremely careful in simultaneously establishing tenancy by the entireties accounts, and labeling them as such. Where a financial institution does not provide a âcheck the boxâ alternative for tenants by the entirety, prudence dictates that the parties write on the account agreement âTBEâ when opening an account. If in doubt about the status of an account, document intent and the joint origin of the ownership to the extent necessary to clearly establish the parties intended and expected that tenants by the entireties was established.
If a married couple owns real estate outside of the State of Florida, it must be determined whether the state in which the property is located recognizes tenancy by the entireties as a form of ownership. Most states, including Colorado and North Carolina, do not recognize tenancy by the entireties. If the state where the real property is located does not recognize tenancy by the entireties, then the ownership should be converted to an intangible so that Florida law will apply. This can be done by transferring the property to a land trust, a partnership, a corporation, or a limited liability company, the interests in which will be held as tenants by the entireties between the spouses.
