When Do Married Couples Own a Bank Account as “Tenants by the Entirety”?

Married couples in Florida often acquire and hold property as “tenants by the entirety.” This is a form of joint ownership. Essentially, each spouse owns a whole, indivisible interest in the underlying property. When one spouse dies, the survivor continues as sole owner. As neither spouse ever owned the property in their sole name, that property does not pass as part of the probate estate of the first spouse to die.

Florida Court Rules Joint Account Not Exempt from Claims of Wife’s Creditor

Another key aspect of Florida property law is that a creditor of just one spouse cannot seek to collect any judgment against assets owned as tenancy by the entirety. At the same time, not every asset jointly owned by two spouses is necessarily a tenancy by the entirety. There are certain legal requirements that must be met.

A recent decision from the Florida Second District Court of Appeals, Loumbos v. Bank One, offers a case in point. In this case, a husband and wife held a joint bank account. One of the wife’s creditors sought to garnish this account to pay off an existing debt. The wife argued that since she and her husband held the account as tenants by the entirety, it was beyond the creditor’s reach.

This led the trial court to conduct a more detailed inquiry into the legal status of the bank account. The husband actually opened the account in his sole name in February 2017. About eight months later, he added his wife to the account’s signature card. On the card, he checked off an option designating ownership as “joint tenants by the entirety.” The creditor argued this was insufficient, however, because the wife’s name needed to be on the account when it was opened to create a tenancy by the entirety. In response, the wife claimed that under binding precedent from the Florida Supreme Court, the signature card was sufficient.

Both the trial court, and later the Second District, sided with the creditor on this issue. The Second District explained that there are six requirements under Florida’s common law to create a tenancy by the entirety. As relevant here, one of those requirements is a “unity of time,” i.e., both spouses took their interest in the property at the same time. Neither the Supreme Court’s prior decision nor the Florida legislature abolished this requirement, the Second District said.

In reaching this decision, the Second District noted that in 2022, the Fourth District Court of Appeals reached a different conclusion, holding that a bank signature card designation was sufficient to create a presumption that an account was held as tenants by the entirety. As such, the Fourth District certified a conflict, which means the Florida Supreme Court may need to step in and decide the correct interpretation of the law on this point.

Contact a Pompano Beach Estate & Trust Litigation Lawyer Today

Determining whether a particular asset is part of a deceased spouse’s probate estate is often a source of litigation following their death. A qualified Pompano Beach estate and trust litigation lawyer can advise you on such disputes. Contact Mark R. Manceri, P.A., today to schedule a consultation.

Source:

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