Tenancy By Entireties Property In Other States: Sometimes Exempt And Sometimes Not Exempt
Under Florida law tenants by entireties property is exempt from a creditor's claim against either spouse individually. Prior entries on this blog have explained that tenancy by entireties is not a statutory exemption. Technically, tenants by entireties property is not "exempt" from creditors because it is not one of the bankruptcy exemptions listed in the Florida statutes. Instead, tenancy by entireties is a concept and an immunity created by the common law of Florida court decisions. Sometimes I have consulted with clients who currently reside in other states but are considering moving to Florida. These clients often tell me they own property in their current residence jointly with their spouse, and they want to know if the property is protected. The answer depends on whether the courts of their current residence protect tenants by entireties property from levy and execution. The answer can be tricky in some states.
For example, one client told me he owned real property as tenants by entireties in another state. I did some preliminary research which indicated that the client's residence recognized tenants by entireties ownership. However, I had difficulty finding bankruptcy cases upholding the exclusion of entireties property from debtors' bankruptcy estates in that same state. In a subsequent conference with the same client and his personal attorney in his home town the attorney told me that his state did recognize ownership of real property by the entireties, but that state's courts refused to exempt the property from levy and execution. The client's property was owned by the entireties but it was not exempt.
If this client moved to Florida his real estate in his previous home state would not be exempt because the exemption of real estate is determined by the laws of the state where the real estate is situated.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
