In Florida, many people mistakenly believe that if they own property or bank accounts jointly with their spouse, those assets are automatically protected from creditors due to the concept of Tenancy by the Entireties. However, this assumption is not always accurate. While Tenancy by the Entireties offers strong protection against creditors in many cases, certain legal conditions must be met for this protection to apply.
To ensure that assets are shielded from creditors, Florida law requires that six specific characteristics, or “unities,” be present. If any of these units is missing, the asset may not be protected, leaving it vulnerable to garnishment by creditors. Let’s take a closer look at each of these six units.
1. Unity of Possession: Equal Ownership and Control
The first key requirement for Tenancy by the Entireties is Unity of Possession. This means that both spouses must have equal ownership, use, and control over the asset. For example, if the asset is a bank account, both account holders must be able to deposit or withdraw funds without the other person’s permission. In other words, both individuals have a 50/50 share of the property or account and must have equal rights to manage it.
2. Unity of Interest: Identical Interests in the Asset
Next is the Unity of Interest, which stipulates that both spouses must have identical interests in the asset. In a bank account, this means both spouses can make equal use of the account (e.g., deposits, withdrawals), without one needing permission from the other. If the interests are not identical—for example, if one spouse is restricted from accessing certain funds—then the asset may not qualify for Tenancy by the Entireties protection.
3. Unity of Title: Joint Ownership from the Beginning
Unity of Title means that both spouses must have acquired the asset through the same legal means, in the same document or title. This is crucial for things like bank accounts or real estate. You cannot add a person to an existing account or property title and automatically qualify for Tenancy by the Entireties protection. The spouse must have been included in the title or account from the very beginning. If this unity is absent, the asset may not enjoy creditor protection.
4. Unity of Time: Simultaneous Ownership
For the asset to be held as Tenants by the Entireties, the Unity of Time must be present. This means that both spouses must have acquired ownership of the asset at the same time. If one spouse acquired ownership before the other, or if one spouse added the other at a later date, then the asset does not meet the requirements for Tenancy by the Entireties.
5. Right of Survivorship: Transfer of Ownership Upon Death
A crucial characteristic of Tenancy by the Entireties is the Right of Survivorship. This means that if one spouse passes away, the surviving spouse automatically becomes the sole owner of the property, without the need for probate. The transfer of ownership happens immediately, and the surviving spouse gains full control of the asset.
6. Unity of Marriage: Must Be Between Married Spouses
Lastly, there is the Unity of Marriage. This is perhaps the most important distinction of Tenancy by the Entireties. The asset must be held by a married couple. This form of ownership does not apply to other relationships, such as those between unmarried partners, family members, or friends. If the asset was acquired while the parties were not married, or if one of the parties is not the legal spouse, then Tenancy by the Entireties protections do not apply.
What Happens if the Six Unities Are Not Met?
If any one of these six unities is missing, the property will not be protected under Tenancy by the Entireties, and it could be subject to creditor claims or garnishment. This is especially important to consider if both spouses are facing joint debts or are involved in a bankruptcy.
While Tenancy by the Entireties can protect assets from creditors in many cases, it’s important to understand that if both spouses owe the debt, the property may not be exempt. The legal intricacies of this concept can be complex, so it’s often beneficial to consult with an attorney who can analyze whether your assets are truly protected and determine what is exempt from creditor claims.
Conclusion
The protection of Tenancy by the Entireties in Florida is a powerful tool for shielding assets from creditors, but only if all six unities are present. A failure to meet any of the six requirements means the asset may not be exempt, leaving it vulnerable to creditor actions. Given the complexity of this issue, it’s a good idea to consult with an attorney to fully understand which of your assets are protected and which may be at risk.
By ensuring that all the unities are met and understanding the nuances of how Tenancy by the Entireties works, you can better protect your property from creditor claims and safeguard your financial future.
The information provided on this page is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. Please contact a licensed bankruptcy attorney to determine your bankruptcy options.