Tenancy By Entireties: Furniture And Financial Accounts

I read a relatively recent bankruptcy court ruling that examined in unusual detail a debtor’s claim of tenancy by entireties protection of a variety of assets owned jointly with his wife. The decision upheld entireties protection of the debtor’s furniture and other personal household property but denied tenancy by entireties ownership of a joint mutual fund account. The facts and holding are instructive for other Florida debtors relying on tenancy by entireties.

The court found that the debtor’s household belongings were exempt entireties assets. Among factors cited by the court were: 1. There was no evidence of any property purchased outside the marriage, 2. No purchases predated the marriage and most were obtained early in the marriage, 3. The furniture was paid for with checks from the couple’s joint bank account funded with joint earnings, 4. The household furnishes were insured under a single insurance policy naming both spouses as insured parties, 5. Both spouses participated in the decisions to buy the household belongings, and 6. The couple’s wills left all property to the surviving spouse.

The court found that the debtor’s joint mutual fund account was not protected as tenants by the entireties property in spite of the presumption under Florida law that financial accounts owned jointly by husband and wife are entireties accounts. The application form for the mutual fund account required the debtor and spouse to list their choice of ownership. Boxes were provided for “joint tenant” and another box for “tenants by entirety”. The debtor checked the “joint tenant” box. The court found that because the debtor had a clear choice of tenancy by entireties ownership and instead checked the box for another ownership option, the debtor had expressly disclaimed entireties ownership with his spouse. This holding is technically correct, and it shows how careful one must be when filling out forms to open financial accounts if one expects tenancy by entireties asset protection.

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