by Anne Buzby-Walt
It was questionable at common law whether a joint tenancy with right of survivorship or a tenancy by the entirety could be created by a conveyance from the owner to the owner and another. This was due to the requirement of the “unities.” In the case of tenancy or tenants by the entirety (TBE), there are six unities: 1) unity of possession (joint ownership and control); 2) unity of interest (the interests in the property must be identical); 3) unity of title (the interests must have originated in the same instrument); 4) unity of time (the interests must have commenced simultaneously); 5) survivorship; and 6) unity of marriage (the parties must be married at the time the property became titled in their joint names).1 Because of the sixth unity, TBE is a form of ownership available only to married couples. A joint tenancy with right of survivorship only requires the first five unities.
Although TBEs and joint tenancies with right of survivorship share many characteristics, there are very significant differences in the legal consequences between these forms of ownership when one spouse declares bankruptcy, attempts to recover monies transferred by the other spouse without permission, or has a creditor unique to that spouse seeking to attach these assets.
When a married couple holds property as tenants by the entireties, each spouse is said to hold it “per tout,” meaning that each spouse holds the whole or the entirety, and not a share, moiety, or divisible part.2 Therefore, property held by spouses as TBE belongs to neither spouse individually, but each spouse is seized of the whole.
Conversely, in a joint tenancy with right of survivorship, each person has only his or her separate share (“per my”) presumed to be equal for purposes of alienation, but for purposes of survivorship, each joint tenant owns the whole, so that upon death, the remainder of the estate passes to the survivor. As described in Sitomer v. Orlan, 660 So. 2d 1111 (Fla. 4th DCA 1995), where ownership is defined as joint tenants with right of survivorship, a creditor of one of the joint tenants may attach that joint tenant’s portion of the property to recover that joint tenant’s individual debt, whereas when property is held as tenants by the entireties, only the creditors of both spouses, jointly, may attach the TBE property. TBE property is not divisible on behalf of one spouse alone, and, therefore, it cannot be reached to satisfy the obligation of only one spouse.3
Because of the notion of each spouse owning the whole, neither spouse acting alone without the joinder of the other may transfer an interest in property held as TBE. Therefore, neither spouse acting individually can bring a partition action.4 Nor can one spouse unilaterally withdraw funds from an account held as tenants by the entireties and transfer those funds to a third party.5 If one spouse transfers funds out of an account titled TBE without the other’s consent, the TBE nature of the property continues, and the other spouse may recover the funds even after the death of the transferor spouse. This is not the case with assets held as joint tenants with right of survivorship, where either owner may withdraw funds and effectively sever the joint tenancy right of survivorship as to the withdrawn funds.6
Over time, the courts adopted the common law rule that both real and personal property could be held as TBE.7 Even though the courts recognized that the TBE form of ownership could exist in real and personal property, the laws relating to the requirements for formation of a TBE have evolved separately — and in some respects, quite inconsistently — as to real and personal property.
At common law, it was not clear whether a joint tenancy with right of survivorship could be created by a conveyance from the owner to the owner and another because of the requirements of unity of time and unity of title. Therefore, it was common to use a straw man to create such an interest.8
At common law, an estate acquired in any way except by inheritance by two or more persons, not husband and wife, created a joint tenancy in them with right of survivorship. To create a tenancy in common, it was necessary to add restrictive or explanatory words so as to expressly provide for tenancy in common. This policy was changed by statute in §5482, Laws of Florida 1927, which provided that “the doctrine of the right of survivorship in cases of real and personal property held by joint tenants shall not prevail in this state.” In 1941, the statute was amended by F.S. §689.15 as follows:
that is to say, except in cases of estates by entirety, devise, transfer or conveyance heretofore or hereafter made to two or more shall create a tenancy in common, unless the instrument creating the estate shall expressly provide for the right of survivorship, and in cases of estates by entirety, the tenants, upon divorce, shall become tenants in common.
With some changes, this statute is very similar to the present F.S. §689.15.
In LaPierre v. Kalergis, 251 So. 2d 885 (Fla. 1st DCA 1971), aff’d 257 So. 2d 33, the Florida Supreme Court held that a deed from father and mother to mother and daughter stating “pursuant to Section 689.15 Florida Statutes, provision is hereby and in this instrument expressly made for the right of survivorship between the grantees” was sufficient to create a joint tenancy with right of survivorship. Notably, it was not necessary, in this case, to use a straw man to create the joint tenancy with right of survivorship. The defendant in LaPierre argued that the unities of interest, time, title, and possession in the grantees were not present. Despite that argument, the court found that the grantors’ intention was crystal clear and that a joint tenancy with right of survivorship had been created.
Again, in Ratinska v. Denesuk, 447 So. 2d 241 (Fla. 2d DCA 1983), the question was whether the real property in question was owned as joint tenants with right of survivorship or as tenants in common. In Ratinska, an individual owner of real property deeded the property directly to the owner and another as joint tenants with right of survivorship, and not as tenants in common, without a conveyance to a straw man. The trial court had held that the unities test must be applied to the deed initially conveying title to the grantor and not to the subsequent deed to the grantor and another as joint tenants with right of survivorship. Therefore, the property was held as a tenancy in common. In overruling the trial court, the district court of appeal said, “We see no point in requiring that property be conveyed twice when a single conveyance is just as effective and has the virtues of economy and efficiency.” The appellate court held that an estate with rights of survivorship was validly created.
F.S. §689.11 now makes it clear that one spouse can create a TBE in real property by deeding the property into the names of both spouses. Attorneys’ Title Insurance Fund, Inc., Title Note 17.01.01 (Rev. 12/93), confirms that a straw man conveyance is not necessary with respect to real property. The Fund cites Florida National Bank v. Gann, 101 So. 2d (Fla. 2d DCA 1958), and LaPierre, and the fact that the Florida Supreme Court affirmed LaPierre and found that the four unities were present despite the absence of a straw man.
Thus, with respect to real property, whether TBE or joint tenancy with right of survivorship, it is clear that the estate can be created by the conveyance by one owner to the owner and another. As to ownership of real property by husband and wife, ownership in the names of both spouses vests title in them as tenants by the entireties.9 In the case of real property, it is unnecessary to describe the owners as husband and wife in the deed in order to establish a TBE, although it is better practice to do so.10
Unlike real property, Florida law has historically treated personal property differently and required that not only must the form of the estate be consistent with entireties requirements, but also the intention of the parties must be proven.11
In First Nat’l Bank v. Hector Supply Co., 254 So. 2d 777 (Fla. 1971), the question presented was whether a joint checking account, maintained by both spouses, could be garnished for payment of one spouse’s judgment debt. The trial court found that the bank account in question was not held as an estate by the entireties, but as joint tenants with right of survivorship, because either of the joint depositors had the power to alienate the account by closing it out and could achieve this alienation individually and without consent of the other. On appeal, the Supreme Court stated:
[I]n personalty matters, a different standard obtains: not only must the form of the estate be consistent with entirety requirements, but the intention of the parties must be proven. The reason for this double standard is easily understood. Realty matters are matters of record which occur infrequently, and which generally involve formal transactions necessarily requiring consent of both spouses. Personalty, on the other hand, is generally not under mandate of record; it may easily be passed by either spouse without mutual consent or without knowledge of the other spouse; finally, it may change hands with great frequency, as in the case of the checking account. In re Lyons Estate, [s]upra at 90 So. 2d 42 (1956). Another reason for the distinction is that the application of entireties concepts to personalty becomes exceedingly complex as the nature of the personalty increases in sophistication, and the judicial mind seeks to require greater safeguards lest the tenancy be abused. Thus, in our bank account cases, we have required the demonstration of intention.12
The court found that the bank account contract or signature card authorizing one spouse to act did not negate the possibility that a TBE could exist in the account, citing F.S. Ch. 708.09, allowing for the passage of powers of attorney between spouses.
In Hector Supply, the court was willing to accept the existence of a power of attorney, permitting one spouse to act with respect to the account as not being inconsistent with the unity of possession. This position as to the unity of possession was consistent with an earlier ruling in Hagerty v. Hagerty, 52 So. 2d 432 (Fla. 1951), finding that the unity of possession would not preclude one spouse from acting for the other when an account was payable to the order of either spouse, as long as there was an expression of authority or agency to act for both. Otherwise, many financial accounts where one spouse can unilaterally write checks, withdraw funds, or authorize investment decisions could run afoul of the requirements of this “unity.”
Perhaps the most important Florida case involving tenancies by the entireties in personal property is Beal Bank, SB v. Almand and Associates, etc., et al., 780 So. 2d 45 (Fla. 2001). Beal Bank involved questions certified to the Supreme Court concerning whether bank accounts titled in the names of both spouses were held as tenants by the entireties and, therefore, not subject to execution by a creditor of only one spouse. These questions, as rephrased to more closely reflect the court’s analysis in the case were: First, in an action by the creditor of one spouse seeking to garnish a joint bank account titled in the names of both spouses, if the unities required to establish ownership as a TBE exist, should a presumption arise that shifts the burden to the creditor to prove that the subject account was not held as tenants by the entireties? Second, in an action by the creditor of one spouse seeking to garnish a bank account jointly titled in the names of both spouses, if the unities required to establish ownership as a tenants by the entireties exist, but the signature card expressly states that the account is owned as a joint tenancy with right of survivorship, does that statement alone constitute an express disclaimer that the account is not held as a TBE? Third, in an action by the creditor of one spouse seeking to garnish a bank account jointly titled in the names of both spouses, if the unities required to establish ownership as a TBE exist, but the signature card expressly disclaims the tenants by the entireties form of ownership, may the debtor resort to extrinsic evidence to prove that a TBE was intended if the debtor establishes that the financial institution did not offer a TBE form of account ownership? The Supreme Court answered the first and third questions in the affirmative and the second question in the negative.
The Beal Bank case involved accounts at three different banks, some of which listed the accounts as titled in the names of both spouses without any specificity as to the particular form of joint ownership. Other accounts listed husband and wife as “JT TEN” or as joint tenants with right of survivorship. In one case, the account agreement stated that
even if the [b]ank at the customer’s request titles the customer’s account as “tenants by the entireties” or receives oral or written notice that the customer intends to treat the funds as being held as such, the customer agrees that as between the customer and the bank, the bank may treat the account like any other joint account and subject to all the terms and provisions set forth above.
Testimony reflected that all funds put into the bank accounts were those of both spouses and were considered controlled by both and owned together.
The court stated that while it understood the considerations which originally led to its decision not to adopt the presumption of a TBE in personal property similar to that in real property, it concluded that stronger policy considerations favored allowing the presumption in favor of a TBE when a married couple jointly owns personal property. Accordingly, the court held that as between the debtor and a third-party creditor (other than the financial institution into which the deposits are made), if the signature card or account does not expressly disclaim a TBE form of ownership, a presumption arises that a bank account titled in the names of both spouses is held as tenants by the entireties as long as the account is established by both spouses in accordance with the unities of possession, interest, title, and time and with right of survivorship. The court further stated that the presumption adopted is a presumption affecting the burden of proof pursuant to F.S. §90.304, thus, shifting the burden to the creditor to prove by a preponderance of the evidence that a TBE was not created.
The Beal Bank court found that statements on the signature card that a bank account titled in the names of a husband and wife is held as joint tenants with right of survivorship do not alone constitute an express disclaimer that the account is not held as a TBE, because a TBE is essentially a joint tenancy modified by the common law doctrine that the husband and wife are one person.
If the signature card expressly states that the account is not held as a TBE and another form of legal ownership is expressly designated, no presumption arises. However, if the debtor establishes that the financial institution did not offer a TBE form of account ownership or expressly precluded that form of ownership, then the debtor may prove by other evidence the intent by which the debtor and spouse held the account as tenants by the entireties.
Beal Bank is important for holding that if an account is held by both spouses and the unities exist, then a presumption arises that the account is held as tenants by the entireties and a creditor must prove that the account is not held as a TBE. However, Beal Bank leaves many questions unanswered because the questions certified to the court assumed that the unities existed. Footnote two to the Supreme Court opinion states, “We do not address the Merrill Lynch account established by Almand, III, which was later amended to include the name of his wife as co-owner. The Fifth District unanimously held that this account was subject to garnishment.” In the opinion of the Fifth District, in Beal Bank, SB v. Almand and Associates, etc., et al., 710 So. 2d 608 (Fla. 5th DCA 1998), the court stated, “We agree that the Merrill Lynch account is subject to execution.” Judge Cobb, concurring in part, dissenting in part, stated, “Almand testified that his wife’s name was added later after he had opened the account, thereby negating one of the requisites for a TBE.”13 Judge Harris, concurring in part, dissenting in part, stated that the Merrill Lynch account “lacked the unities of time and title and thus is not held as a TBE.”14 Essentially, the Supreme Court affirmed that a TBE in a financial account could not be created by adding the spouse’s name to an existing account.
The court in In Re Aranda, 2011 WL 87237 (Bankr. S.D. Fla. 2011), held that the relevant point in time for establishing the unities for TBE ownership is when an account is opened. The subsequent addition of the spouse to the account was not sufficient to satisfy the unity of time.
In Cacciatore v. Fisherman’s Wharf Realty Limited Partnership, 821 So. 2d 1251 (Fla. 4th DCA 2002), the court applied the Beal Bank holding to stock certificates. The bankruptcy court, in In re Daniels, 309 B.R. 54 (Bankr. M.D. Fla. 2004), applied Beal Bank to all personal property, stating, “Where the required unities are present, the court concludes that Beal Bank’s presumption can and should be extended to include all marital personal property, not just financial accounts.” This holding was further confirmed by In Re Kossow, 325 B. R. 478 (Bankr. S.D. Fla. 2005), which held that “the policy justifications offered by the Florida Supreme Court in Beal Bank should be applied to all personalty.” Equitable interests may also be held as tenants by the entireties.15
Statutory authority for ownership of personal property as tenants by the entireties is woefully thin in Florida. Section 689.11 provides authority for creation of tenants by the entireties only with respect to real estate, and makes no mention of personal property. Section 689.115 provides that “any mortgage encumbering real property or any assignment of a mortgage encumbering real property, made to two persons who are husband and wife, heretofore or hereafter made, creates an estate by the entirety in such mortgage and the obligation secured thereby unless a contrary intention appears in such mortgage or assignment.”
Section 689.15 states the doctrine of right of survivorship in the cases of real estate and personal property held as joint tenants does not prevail in the state of Florida. Although this statute applies to personalty, it does not address how a TBE in personal property may be created.
F.S. §655.79, a banking statute, was modified in 2008 to include the statement: “Any deposit or account made in the name of two persons who are husband and wife shall be considered a tenancy by the entirety unless otherwise specified in writing.” Presumably there is no longer a requirement to establish the unities in the case of bank accounts. The effect of the 2008 amendment to F.S. §655.79 does, however, create significant differences in the treatment of bank accounts, as opposed to other personalty. The legislative history for the 2008 change to §655.79 states that the amendment is in conformance with the Supreme Court’s recommendation in Beal Bank that the law be clarified. This legislative change creates a clear presumption as to bank accounts, but appears to foreclose the possibility of introducing extrinsic evidence to prove intent to create a TBE where the account agreement states “Jt Ten” or “joint tenants with right of survivorship,” as was allowed in Beal Bank.
F.S. §319.22(2)(a)1.a provides that when a motor vehicle or mobile home is registered in the names of two or more persons as co-owners by the use of the word “or,” title is held in joint tenancy. Each owner has the absolute right to dispose of the vehicle or mobile home. Upon the death of a co-owner, the interest of the decedent passes to the survivor. This provision applies even if the co-owners are spouses. F.S. §319.22(2)(a)1.b provides that when a vehicle or mobile home is registered in the names of two or more persons as co-owners by the use of the word “and,” the signature of each co-owner, or his personal representative, is required to transfer title to the vehicle or mobile home. In the Daniels case, the court found that a motor vehicle titled in the name of a debtor “or” his nondebtor spouse was not owned as tenants by the entireties, regardless of their intent, because of the specific statute describing how to create interests in vehicles or mobile homes in Florida.16 The Daniels court concluded that Beal Bank did not override F.S. §319.22.17 Therefore, in order to title a vehicle or mobile home as a TBE, it is necessary to state the names of both spouses with the conjunctive “and.”
Except in the context of bank accounts, there is no statutory authority in Florida as to how to create a TBE in personal property, and no statutory authority that a conveyance by one spouse to both spouses as TBE is sufficient to satisfy the requirements of the unities. To the contrary, Beal Bank held that one spouse cannot simply add his or her spouse to an account, implying that a straw man could be required or that an entirely new account must be established. (Although in the Kossow case, the bankruptcy court appeared to accept a transfer of tangible personal property without a straw man.)
It is also not entirely clear what is required in order to satisfy the requirement of the unity of possession. Account agreements vary widely, and may or may not contain the requisite agency provisions, although the courts have been willing to find an agency relationship where one spouse is empowered to act individually with respect to the account.
The uncertainties under Florida law as to the means of creating a TBE in personal property should be resolved and clarified by statute. Likewise, bank accounts should not be treated differently from other types of financial accounts or personal property.
1 See First Nat’l Bank v. Hector Supply Co., 254 So. 2d 777 (Fla. 1971), cited in Sitomer v. Orlan, 660 So. 2d 1111 (Fla. 4th D.C.A. 1995).
2 See Bailey v. Smith, 103 So. 833 (1925).
3 See also Winters v. Parks, 91 So. 2d 649 (Fla. 1956).
4 See Bailey, 103 So. at 834.
5 See Lerner v. Lerner, 113 So 2d 212 (Fla. 2d D.C.A. 1959).
6 See Sitomer, 660 So. 2d at 1114.
7 See First Nat’l Bank v. Hector Supply Co., 254 So. 2d 777, 779 (Fla. 1971).
8 See Florida National Bank of Jacksonville v. Gann, 101 So. 2d (Fla. 2d D.C.A. 1958).
9 See Losey v. Losey, 221 So. 2d 417 (Fla. 1969).
10 See American Cent. Ins. Co. v. Whitlock, 165 So. 380 (1936).
11 See Hector Supply Co., 254 So. 2d at 780.
12 Id. at 781.
13 Beal Bank, SB v. Almand and Associates, etc., et al., 710 So. 2d 608, 610 (Fla. 5th D.C.A. 1998).
14 Id. at 616.
15 See Passalino v. Protective Group Securities, Inc., 886 So. 2d 295 (Fla. 4th D.C.A. 2004); Snyder v. Dinardo, 700 So. 2d 726 (Fla. 2d D.C.A. 1997).
16 Daniels, 309 B.R. 54 (M.D. Fla. 2004).
17 See also Xayavong v. Sunny Gifts, Inc., 891 So. 2d 1075 (Fla. 5th D.C.A. 2005).
Anne Buzby-Walt is a shareholder in Fisher, Tousey, Leas and Ball and is based in Jacksonville, Ponte Vedra, and St. Augustine. She is board certified in wills, trusts, and estates, and is a graduate of Duke University (B.A. 1982) and Wake Forest University (J.D. 1985). She is a fellow in the American College of Trust and Estate Counsel. She is also a member of the executive council of the Real Property, Probate and Trust Law Section, member of the Probate Law and Procedure Committee, and a member and current vice chair of the IRA, Insurance and Employee Benefits Committee. She is also author of Ch. 14 on final distribution and discharge in Practice Under the Florida Probate Code (Fla. Bar 2010).
These materials were derived, in part, from a paper presented by Justin Savioli and Patrick Lannon to the Estate and Gift Tax Committee of the Real Property and Probate and Trust Law Section of The Florida Bar. Special thanks and recognition are given to themn and to Bruce Marger for his review and input.
This column is submitted on behalf of the Real Property, Probate and Trust Law Section, George Joseph Meyer, chair, and William P. Sklar and Kristen Lynch, editors.