One of my Florida clients has a joint account with his spouse at an internet bank. The bank has no branches other than its main office in Utah. The husband is facing personal liability from a failed commercial real estate venture. The client asks if the bank account is exempt as a tenants by entireties account.
A bank account is deemed to located where the account was opened. In most cases, a financial account is opened at a branch location. Because internet banks have no branches, I suspect a court may find the account is situated at the bank’s home office. A debtor could argue that in the case of an internet bank without branches the account is opened where the debtors resided at the time they applied for the bank account. The issue could go either way, but I think the better answer is that this account is anchored at the internet bank’s home office in Utah. Utah law does not recognize tenants by entireties ownership. I think the account is not protected as an entireties account.
If I’m right, then Florida debtors may be exposing joint bank accounts at national internet banks where the internet bank home office is in a state without entireties law.