I sometimes get calls from out of state clients who own Florida real estate and want to know if their real estate is protected from creditors. People who reside in another state cannot qualify for protection of a Florida property as their homestead because a protected homestead must be your primary residence. A more interesting question is whether Florida real estate owned jointly by a husband and wife residing outside of Florida is protected as tenants by entireties property. In other words, does the debtor and his spouse have to be Florida residents in order to have tenants by entireties property protected from the creditors of one or the other spouse?
The asset exemptions provided by the Florida Constitution and Florida Statutes are exclusively for Florida residents. Tenancy by the entirety protection is a creation of common law, ie., judicial decisions, and it is not an exemption provided by statute or constitution. There is no case law that reserves tenancy by the entireties protection of Florida assets only to Florida residents.
As a general principal of law, the common law exemptions applicable to real property is determined by the jurisdiction where the property is located. Whether a debtor can claim tenancy by entireties protection of Florida real estate is based on Florida law regardless of where the property owner maintains his primary residence. Therefore, Florida real property owned by married couples living in another state is protected by the creditors of either spouse under Florida’s common law protection of tenants by entireties property.
The analysis set forth above is consistent with the holding in a recent bankruptcy court decision. In re Cauley, 374 B.R. 311.