Does Move From Florida Forfeit Tenancy By Entireties?
A debtor has long-established bank accounts in Florida titled jointly with his spouse. The accounts are protected from creditors as tenants by entireties property. The debtor and his family then move out of Florida to Texas. Texas is a community property state which does not recognized the concept, or exemption, of tenancy by the entireties. The debtor asks me whether his Florida bank accounts are protected after he moves to Texas.
I'm not familiar with a case on this issue, but in my opinion this debtor loses the protection of his joint bank accounts the day he unpacks his moving van in Texas. The debtor/creditor laws concerning real estate are based on the law where the property is situated so that this debtor's jointly owned real property in Florida, if any, would remain exempt T by E property after he moves. The laws concerning personal property, including financial accounts, is based on the laws where the debtor resides. Once the debtor resides in Texas I think that he cannot claim an entireties exemption for his financial accounts wherever located.
A reverse move would have the opposite result, in theory. A Texan with marital bank accounts in Texas or Florida could achieve tenancy by entireties protection by taking up residence in Florida.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
Jonathan,
I tend to disagree with your analysis. While I have not performed a research project on the subject, in my view the relative rights the parties established in one state do not change with respect to a given asset when they move to another state. It is not a matter of the choice of law rules regarding situs, but rather a matter of the relative rights of the parties. For example, community property rights established in Texas with respect to corporate stock would not generally be affected by a move to Florida. This is a significant problem in estate planning. Good planners often take affirmative steps to eliminate whatever community property rights exist when a couple moves to Florida. Cf, the Florida Uniform Disposition of Community Property Rights at Death Act, FS 732.216 thru 732.228.