Tenants By Entireties : Account Owned Through Couple’s Living Trusts

Bank accounts owned jointly by a husband and wife are exempt from the individual creditors of either spouse as tenants by entireties property. Today, one of may clients described a joint bank account that was titled in the name of their respective living trusts. The account was owned by the Husband, as trustee of husband’s living trust and Wife, as trustee of wife’s living trust. We discussed the issue of whether a bank account owned by spouse’s living trusts, rather than the spouses’ individual names, is a protected entireties accounts.

Florida courts have extended homestead protection to a residence owned by a debtor as the trustee of the debtor’s living trusts. The homestead provision of the Florida Constitution applies protection to “natural persons.” The courts have “looked through” the living trust to find that the trustmaker and trustee, the natural person, is the real legal owner of the property who is entitled to protection under the homestead clause of the Constitution. It is not clear whether courts would similarly look through a married couple’s separate living trust to construe a bank account titled in the name of marital trusts as an entireties account.

I conducted just a few minutes of legal research and found no Florida state court or bankruptcy case which discussed this type of fact pattern. I suspect that most courts would consider a bank account titled jointly in the names of spouses’ separate living trusts to be an entireties account. There would be a greater chance of tenants by entireties protection if the couple included in their trust agreement a statement that they intended to retain tenants by entireties ownership of assets owned jointly by their respective living trusts or by a joint living trust.

Last updated on May 22, 2020

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