Tenants By Entireties Does Not Depend Upon Florida Residency
"Assets owned jointly by married Florida residents is exempt from the individual judgment creditors of either spouse because the joint assets are owned tenants by the entireties." Most people consider the foregoing sentence to be a correct principal of Florida law. The sentence is true, but it is also misleading. The issue is that the quote suggests that tenancy by entireties is an "exemption" applicable to "Florida residents" and the quote does not consider the nature or location of property in question. Actually, tenants by entireties is not a Florida creditor "exemption." Florida exemptions from creditor levy and in bankruptcy proceedings are set forth in Chapter 222 of Florida statutes. These statutory exemptions are applicable only to Florida residents. Tenancy by the entireties is not a statutory exemption; is a principal established by the traditions of Florida case law. Florida residency is not a prerequisite for tenants by entireties protection. More specifically, you do not have to be a Florida resident to enjoy the protection of jointly owned real property (land) or tangible personal property under the entireties umbrella if the same assets are situated in the state of Florida.
Consider, for example, a married couple residing in Georgia and owning jointly a parcel of real property in Florida. A judgment creditor of either spouse cannot levy on the Florida real estate owned by the Georgians because it is owned by the entireties under Florida's property laws. A Florida married couple cannot protect as entireties property jointly owned real property situated in Georgia because Georgia property law does not recognize T by E. However, if the same Florida couple has a joint stock account or a partnership interest (or other intangible personal property) at a New York brokerage house the account may be protected from either spouse's creditors because the law applicable to intangible personal property is the law of the debtor's residence (Florida). The law applicable to physical assets (such as automobiles and boats) is the law where the asset is situated. Florida married residents cannot protect under the T by E umbrella a boat docked in Georgia.
To understand tenancy by the entireties you must understand that T by E is not truly an "exemption" created by Florida statutes for the exclusive benefit of Florida residents.
Our office is facing this issue now. (In re Holland).
Illinois single debtor TBE property in Florida.
The only case I see for this issue is In re Cauley. Are there any others?
A very succinct and elegant explanation. Oddly, I got a question on my blog from an Illinois attorney this week on the very same issue. He too had assumed that tenancy-by-the-entireties would only apply where both residents were spouses. Apparently, he advises physicians in his home state on asset protection and one method is for the doctor to buy a condo or other real property in Florida with his or her spouse. As for the intangible personal property, I assume the reverse would be true? That is, the out of state couple cannot protect intangible personal property merely by opening accounts in Florida. For that matter, I suppose it would be a good idea to not purchase an interest in a Florida co-op.
In a Florida LLC where the Managing Members operate under a
managing agreement; and there are only two managing members
husband and wife. If one files Bankruptcy for personally signed credit card debts, and other loans. What affect will this have on the assets, and property of the LLC; which is not a apart of the debt? Can a Creditor attack the LLC
for a personnaly filed Bankruptcy ?