Is Florida a Community Property State?

Florida is not a community property state. Florida follows common law property rules, which means ownership depends on how an asset is titled rather than when it was acquired during the marriage. A bank account in one spouse’s name belongs to that spouse alone, and a creditor of the other spouse cannot reach it.

Married couples in Florida can hold assets as tenants by the entirety, a joint ownership form that shields property from either spouse’s individual creditors. No community property state offers anything comparable.

What Is a Community Property State?

Nine states use community property rules: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In those states, all income earned and assets acquired during the marriage belong equally to both spouses regardless of title. Each spouse holds an undivided 50% interest in every community asset.

The creditor protection problem is built into the structure. Because each spouse owns an identifiable half-interest, a creditor holding a judgment against one spouse can execute against that spouse’s 50% share of community assets—including assets titled solely in the non-debtor spouse’s name. A physician in California whose spouse is sued may find that half of every jointly acquired asset is exposed to the spouse’s creditor, even accounts the physician opened and funded alone.

Florida and the remaining 41 states follow common law property rules. The spouse whose name appears on the title owns the asset. A creditor of one spouse is limited to that spouse’s own property, and assets titled exclusively in the non-debtor spouse’s name are generally beyond reach.

How Does Florida Divide Property in a Divorce?

Florida uses equitable distribution under § 61.075 of the Florida Statutes. The court classifies all assets as either marital or non-marital, then divides the marital assets in a manner it considers fair. The division does not have to be equal.

Marital property includes all assets and liabilities acquired by either spouse during the marriage, regardless of how the asset is titled. A brokerage account one spouse opens during the marriage using earned income is marital property even if only that spouse’s name appears on the account. Non-marital property includes assets acquired before the marriage, inheritances received by one spouse, and gifts from third parties—provided the owner kept those assets separate and did not commingle them with marital funds.

Equitable distribution applies only in divorce proceedings. Outside of divorce, Florida follows common law titling rules for determining who owns an asset and whether a creditor can reach it.

How Does Tenancy by the Entirety Protect Married Couples?

Florida’s common law property system creates a protection that community property states cannot offer. Married couples in Florida can hold assets jointly as tenants by the entirety, an ownership form that treats the marital unit as a single entity. A creditor holding a judgment against only one spouse cannot force the sale of, garnish, or place a lien on any entireties property.

The protection covers real estate, bank accounts, brokerage accounts, vehicles, and virtually every other asset that can be jointly titled. Among the roughly 25 states that recognize tenancy by the entirety, many limit the doctrine to real estate. Florida applies it to every asset category, making its entireties protection the broadest in the country.

Community property provides no comparable shield. The unified ownership that makes tenancy by the entirety impervious to individual creditors does not exist under community property principles, where each spouse’s identifiable 50% share can be targeted separately.

What Happens to Community Property When You Move to Florida?

Community property acquired in another state does not automatically convert to common law ownership when a couple moves to Florida. Florida’s Uniform Disposition of Community Property Rights at Death Act (Chapter 732, Part III) preserves the property classification that the former state created. Assets that were community property in California, Texas, or another community property state generally retain that character after the move.

This creates a real creditor exposure. A married man who acquired an LLC membership interest in his own name while living in Texas brought a community property interest with him when he and his wife moved to Florida. Under Texas community property law, his wife held a separate 50% interest in that LLC.

When a Texas judgment creditor pursued collection against the wife, the creditor sought to levy on her community property interest in the husband’s LLC. That interest would not have existed under Florida law. Community property rights vested in the former state survive relocation, even though Florida does not create community property interests of its own.

Couples who simply continue holding assets as they were titled in the former state keep the community property classification and its weaker creditor protection. The community property does not become tenants by the entirety property automatically, because community property rights are separate ownership interests and do not include survivorship.

How Do You Convert Community Property to Tenants by the Entirety?

Couples relocating from a community property state should affirmatively retitle jointly held assets to establish tenancy by the entirety under Florida common law. The conversion requires creating new ownership, not just changing a label on existing accounts.

For bank and brokerage accounts, both spouses should open new accounts at a Florida institution and designate entireties ownership on the account agreement. Depositing former community property funds into the new entireties account converts the character of those funds. For real estate, the couple must execute a new deed conveying the property to both spouses as tenants by the entirety.

Retirement accounts follow a different path. An IRA or 401(k) opened while living in a community property state generally retains its community property character. Transferring the funds to a new Florida account causes the money to fall under Florida’s exemption laws, which protect retirement funds without any dollar limit.

The retitling process is not automatic and requires deliberate action on each asset. Couples who relocate without retitling leave former community property exposed to the creditor vulnerabilities that community property carries.

Does the Florida Community Property Trust Provide Creditor Protection?

A Florida community property trust is a tax planning tool, not a creditor protection tool. Florida enacted the Community Property Trust Act effective July 1, 2021, allowing married couples to create a trust that treats contributed assets as community property for federal income tax purposes. The primary benefit is a full stepped-up basis on both halves of community property when the first spouse dies—an advantage that tenancy by the entirety does not provide.

The tradeoff is creditor exposure. The statute does not extend tenancy by the entirety protection to assets held in a community property trust. Creditors of one spouse may be able to reach that spouse’s 50% interest in the trust property under community property principles. Couples considering a community property trust for basis-planning purposes should weigh the income tax savings against the loss of entireties creditor protection on those same assets.

What Happens to Marital Property When a Florida Spouse Dies?

Florida does not follow community property rules at death. A deceased spouse’s assets pass through that spouse’s estate plan—by will, trust, or intestacy—rather than being divided automatically into equal halves. Tenancy by the entirety property passes directly to the surviving spouse outside probate.

Florida protects surviving spouses through an elective share statute rather than a community property split. Under § 732.2065, a surviving spouse can claim 30% of the deceased spouse’s augmented estate regardless of what the will provides. The elective share prevents total disinheritance but does not guarantee a 50% interest the way community property does.

The tax treatment at death is where community property states have an advantage. In a common law state like Florida, only the deceased spouse’s share of jointly held property receives a stepped-up basis to fair market value. The surviving spouse’s share retains its original cost basis. In a community property state, both halves receive a full step-up—potentially eliminating capital gains on the entire asset. The Florida community property trust was created to capture this basis advantage for Florida couples willing to accept the trade-off in creditor protection.