A client presented today an interesting question which I can not answer with any certainty. The well-established rule under Florida case law is that tenants by entireties property (property owned jointly by husband and wife) is immune from creditors of either spouse individually, but the property is not protected from joint creditors. This particular client was a Florida resident whose spouse was a California resident. The client (husband) had recently moved to Florida to start new employment, but his wife remained in their California home to continue medical treatment. California is a community property state which does not even recognize the concept of tenants by entireties, not to mention its exemption from creditors.
The husband faced potential lawsuit. The issue was whether a Florida resident married to a non-Florida resident of a community property state. Do both husband and wife have to be Florida residents in order for the Florida debtor to protect marital property? I know of no case law on this issue. In my opinion, the husband’s property located in Florida would be protected as tenants by entireties property because his ownership interest would be characterized by Florida law. However, I do not have support for this conclusion. It will be interesting to see if the question is presented to a Florida appellate court.
About the Author
Jon Alper is an expert in asset protection planning for individuals and small businesses.
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