Much has been written about technical procedures for setting up a tenants by entireties account. One of the rules, expressed in several prior court decisions, is that any joint account owned by husband and wife is presumed to be an entireties accounts even if the account title does not state “tenants by entireties” provided however that the debtor did not disclaim or refuse the entireties presumption.
Some account application forms have a tenants by entireties option that a debtor may select by checking a box. Other financial institutions use account applications that do not have an entireties option for married owners but only a joint tenants with survivorship option. One theory is that if an application form includes the “entireties box” but the owner check the box for joint tenants with survivorship then the owners have affirmatively disclaimed entireties ownership- theory being that the entireties option was available to them but they chose an alternative title.
I had advised many clients who owned financial accounts as joint tenants with survivorship to check their original account applications to see if they failed to select an option to own the account by entireties. If that were the case, I usually advised these people to open new accounts clearly designated as tenants by entireties account.
Recently a came across in my research a bankruptcy case which expressed a more liberal view of title documents, applications, and the failure to select an available entireties ownership box. This case involved a boat title and the Bill of Sale executed to buy the boat. A husband and wife filled out a Bill of Sale when they purchased their boat. The Bill of Sale application gives married purchasers several title options including tenants by entireties and joint tenants with survivorship. This couple check the box for joint tenants so that the Bill of Sale was issued as husband and wife joint tenants with rights of survivorship.
The court decided that the debtor and spouse did not clearly disclaim ownership of the boat by the entireties even though they did not check the entireties box. There is no governing statute concerning presumptions of boat ownership as there is with cars or jet skis. The judge found that ownership was ambiguous. The spouses met the requirements for entireties ownership, and the court said the law presumes that married property is owned by entireties.