One of my asset protection clients recently moved to Florida from Arizona with his family. The client is being sued in Arizona, but his wife is not a defendant. They jointly own a house in Arizona which they have rented. The house has no equity currently. However, the house is fully furnished with furniture purchased during their marriage. The client understands the plaintiff and potential creditor will have a lien on the Arizona house if the plaintiff wins the lawsuit. The client asked me if the furniture in the house is exempt as tenants by entireties property because he and his wife are now Florida residents.
The general rule is that a judgment creditor levies upon real property in the state where it is located. The rule regarding personal property is more complicated. A judgment creditor is not limited to any one state in pursuit of a debtor’s personal property. A creditor can levy upon property wherever he can find it. If this creditor and his wife buy furniture for their Florida home the furniture would be exempt as tenants by entireties property. However, Florida debtors cannot export exemptions to other states. Arizona is a community property state that does not recognize tenancy by entireties ownership. The debtor cannot assert entireties protection for his Arizona furniture, and a judgment creditor could levy upon the debtor’s interest in all personal property the creditor finds in the previous home or anywhere else in Arizona.