The Florida Supreme Court says that all joint bank accounts owned by a husband and wife are presumed to be exempt tenants by entireties accounts unless the spouses have disclaimed entireties ownership. What does “disclaiming entireties ownership” really mean?
A recent Florida appellate court addressed this issue. A couple opened a new bank account and told the bank employee they wanted a joint account without specifying “tenants by entireties.” The bank employee filled out the paperwork and checked the box next for a joint account with rights of survivorship. There was another option on the bank’s form for “Mulitple-Party Account-Tenancy by the Entireties.” The bank employee was unfamiliar with tenancy by entireties and never discussed the option with the couple. The same couple did not discuss with the bank employee their intent to have an entireties account.
There was no place on the form for the customers to initial their account selection, and neither husband nor wife initialed that part of the form nor were they asked to do so by the bank. In a later court proceeding the issue arose as to whether this bank account was an entireties account under the presumption created by the Florida Supreme Court.
The appellate court held that the couple had waived their right to an exempt entireties account. The court explained that there are two ways to disclaim entireties. First, there are express disclaimers where the customer affirmatively selects (by checking a box) a form of ownership other than entireties. Or, there are implied disclaimers where the customer signs a bank form without checking the entireties box that was offered on the form as an option. The court said the couple implicitly waived entireties protection when they signed the bank contract which contained the unselected option of an entireties account.
The court held that people have a duty to learn about the legal meaning of contracts they sign. The bank has an obligation to provide customers an tenants by entireties option but not to assit them in making the right choice for asset protection purposes.
I believe this is a harsh result that unfairly burdens laymen who simply want a bank account. The court said in its opinion that “only a handful of attorneys in Florida are able to describe the differences between a tenancy by entireties bank account and a joint account with right of survivorship.” How then can the courts impose upon laymen a legal obligation to investigate and understand this technical legal concept when they open a financial account? It’s not fair.