What Happens to Tenancy by the Entirety in a Florida Divorce

Divorce immediately destroys tenancy by the entirety. When a Florida court enters a final judgment dissolving the marriage, every asset the couple held as tenants by the entirety converts to a tenancy in common under Florida Statutes Section 689.15. Each former spouse receives an undivided fifty percent interest, and the creditor protection that shielded those assets throughout the marriage vanishes.

A judgment creditor who could not touch a married couple’s home, bank accounts, or investment portfolios can levy against the debtor ex-spouse’s fifty percent interest the day the divorce becomes final. For couples who built their asset protection around entireties ownership, the divorce creates exposure that requires planning before, during, and after the dissolution.

How Divorce Converts Entireties Property to Tenancy in Common

Florida Statutes Section 689.15 provides that entireties tenants become tenants in common upon dissolution of marriage. The Florida Supreme Court confirmed the automatic nature of this conversion in Powell v. Metz, 55 So. 2d 915 (Fla. 1951), holding that the conversion occurs the instant the divorce decree becomes effective—not when the parties physically divide their assets or retitle their property.

There is no grace period. A creditor holding a judgment against one spouse can immediately record that judgment against the newly created tenancy in common interest once the dissolution is entered. The creditor does not need to wait until the marital settlement agreement is implemented or until deeds and account titles are updated.

The conversion applies to every type of entireties property simultaneously. Real estate, bank accounts, brokerage accounts, vehicles, LLC membership interests, and any other asset held as tenants by the entirety all become tenancies in common at the same moment. A couple cannot selectively preserve entireties protection on some assets while divorcing.

Why Entireties Property Is Presumed Marital

Florida’s equitable distribution statute, Section 61.075, creates a presumption that property held as tenants by the entirety is marital property subject to division. This applies regardless of when the property was acquired.

Section 61.075(6)(a)(2) presumes that all real estate held as tenants by the entireties is a marital asset, regardless of when it was acquired. The same rule applies to personal property under Section 61.075(6)(a)(3). The Florida Supreme Court reinforced this presumption in Robertson v. Robertson, 593 So. 2d 491 (Fla. 1991), holding that even when one spouse can prove the property was purchased entirely with nonmarital funds, the act of titling it as tenants by the entirety creates a presumption of gift that must be overcome.

Overcoming that presumption requires clear and convincing evidence under Section 61.075(6)(a)(4). The spouse claiming the property is nonmarital must show that no gift to the other spouse was intended when the property was placed into entireties ownership. The Fifth District Court of Appeal addressed this in Hill v. Hill, 675 So. 2d 168 (Fla. 5th DCA 1996), where the former husband successfully proved the conveyance was solely for survivorship purposes rather than as a gift.

These two rules create a trap. Property placed into entireties ownership for creditor protection is simultaneously being classified as marital property for equitable distribution purposes. A spouse who converted separate assets into entireties form as creditor protection may find those same assets fully exposed to division when the marriage ends.

When Creditors Can Reach Former Entireties Property

The most dangerous period for a debtor spouse falls between the filing of a divorce petition and implementing the marital settlement agreement. Creditors of one spouse know that entireties protection will soon end, and sophisticated creditors monitor dissolution proceedings for exactly this reason.

Once the final judgment is entered, the former debtor spouse’s fifty percent interest in every previously protected asset becomes immediately available to creditors. If the debtor spouse receives specific assets in the equitable distribution, those assets carry no residual entireties protection.

The exposure is not limited to the debtor spouse’s share. If the marital settlement agreement requires one spouse to transfer assets to the other, the transferring spouse’s creditors may challenge those transfers under Florida’s Uniform Voidable Transactions Act. A transfer made under a divorce settlement can still be voidable if the transferring spouse was insolvent at the time and the transfer was made to hinder creditors rather than as a genuine arm’s-length exchange.

However, transfers of entireties assets made before the divorce is finalized are harder for creditors to attack. While the marriage is still intact, entireties assets remain exempt from creditors of either individual spouse. A transfer of exempt property generally cannot be treated as a fraudulent transfer because the debtor had no obligation to preserve exempt assets for creditors. Couples restructuring assets in anticipation of divorce should complete those transfers while the marriage is still intact.

How Post-Divorce Obligations Are Treated

Equitable distribution awards are treated as ordinary money judgments. If a divorce court orders one spouse to pay the other a lump sum or installment payment as part of the property division, the receiving spouse is simply a judgment creditor. The paying spouse can use Florida’s standard exemptions to protect assets from collection of this obligation.

Child support and alimony operate under different rules. Florida law gives support obligations priority over most exemptions. Head-of-household wage protection under Section 222.11 contains an exception for court-ordered support. Homestead protection under Article X, Section 4 of the Florida Constitution cannot be waived by a debtor, but support obligations receive more aggressive collection treatment than ordinary judgments.

Joint debts present a separate problem. If both spouses co-signed a loan during the marriage, the creditor can pursue either former spouse after divorce regardless of which spouse the marital settlement agreement assigned that debt to. The marital settlement agreement is a contract between the spouses. It does not bind the creditor, who was not a party to the agreement.

Planning Before Divorce to Preserve Protection

Couples who anticipate divorce and depend on entireties protection face a narrow window to restructure before the dissolution is filed. Once the divorce petition is filed, the cut-off date for classifying marital assets has been established under Section 61.075(7), and any transfers made after that point face heightened scrutiny.

A debtor spouse who receives assets in the equitable distribution can retitle those assets into exempt forms recognized under Florida law. The homestead exemption protects an unlimited value in the primary residence—up to half an acre inside a municipality—regardless of marital status. Retirement accounts receive protection under Florida Statutes Section 222.21. Annuities and life insurance proceeds are protected under Section 222.14. These exemptions do not depend on marriage and remain available to a single person after divorce.

Transferring assets into a multi-member LLC before divorce can provide some post-divorce creditor protection through the charging order limitation under Florida Statutes Section 605.0503. After divorce, the former spouse who retains the LLC interest has a membership interest that creditors can reach only through a charging lien, not through forced liquidation or seizure of LLC assets. Converting entireties assets to LLC ownership before divorce may trigger both fraudulent transfer concerns and equitable distribution complications.

If the debtor ex-spouse remarries, new assets acquired jointly with the new spouse can be titled as tenants by the entirety, restoring the protection for those assets going forward. This does not help with assets that were already exposed during the period between marriages.

Using the Marital Settlement Agreement Strategically

The marital settlement agreement can be structured with creditor exposure in mind, though its primary purpose must remain the equitable division of assets between the spouses.

Giving the non-debtor spouse most liquid assets while the debtor spouse retains exempt assets—homestead, retirement accounts—can minimize total creditor exposure. This approach is legitimate when it reflects a genuine negotiation between the spouses, but a court may scrutinize an agreement that appears designed primarily to defraud creditors rather than to achieve fair distribution.

The timing of asset transfers under the settlement agreement matters as well. Assets that are promptly retitled into exempt forms after distribution receive better protection than assets that sit in non-exempt accounts while the debtor spouse delays implementation.

What Happens to Specific Types of Entireties Property

A marital home held as tenants by the entirety becomes a tenancy in common upon dissolution. If one spouse is awarded the home, the other spouse must execute a quitclaim deed transferring their interest. Until that deed is recorded, both former spouses appear on the title as tenants in common, and a creditor of either spouse can record a judgment lien against the property.

Bank and brokerage accounts lose their entireties character the moment the marriage ends. Under Section 655.79, the presumption that a joint account between spouses is held as tenants by the entirety depends on the account holders being married. Once the marriage is dissolved, the accounts are simply joint accounts with no special creditor protection. Tenancy by the entirety accounts require a valid marriage, and financial institutions will reclassify or close the entireties designation upon notice of the dissolution.

LLC membership interests present additional complexity. If both spouses owned an LLC as tenants by the entirety, the divorce converts that ownership to a tenancy in common. The LLC operating agreement should address what happens upon dissolution of the members’ marriage, including buyout provisions, management transition, and whether charging order protection applies differently to a co-owned LLC after the marital relationship ends.

Second Marriages and Restored Protection

Remarriage creates an opportunity to re-establish entireties protection, but only for assets acquired or retitled after the new marriage. Assets that were exposed to creditors between marriages do not retroactively gain protection when placed into entireties ownership with a new spouse.

Any transfer of assets into entireties ownership with a new spouse must satisfy the same requirements that apply to any entireties creation. The transfer must not constitute a voidable conveyance under Chapter 726, the transferring spouse must be solvent at the time of the transfer, and the transfer must satisfy the six unities required for valid entireties ownership. Courts scrutinize transfers to entireties accounts when creditors challenge them under the same fraudulent transfer standards that apply to any other asset movement.

Tenancy by the entirety provides strong creditor protection during marriage, but that protection depends on a legal status that can change. Couples facing serious creditor exposure should layer additional protections that survive regardless of marital status, including homestead, retirement exemptions, and irrevocable trusts.