Turning Straw Into Gold: A Comprehensive Guide to Tenants by the Entirety in Florida
In the tale of Rumpelstiltskin, a miller’s daughter, with the aid of a mysterious figure, turns straw into gold, thereby transforming something ordinary into something of immense value. In the legal realm, married couples in Florida possess a similarly magical power: the ability to own their ordinary property as tenants by the entirety (TBE) property. TBE treats the couple as a single legal entity and offers significant protection from individual creditors while both spouses are living. While TBE is not the only form of property ownership available to a married couple, as Florida also permits couples to own property separately from each other, through a life estate or remainder interest, as joint tenants with rights of survivorship, and even as community property,[1] TBE remains the one form of direct ownership that is available exclusively to married couples. Despite the availability of TBE property ownership, the process of creating and maintaining TBE property requires a thorough understanding of Florida law and careful attention to detail.
TBE Overview
TBE is a legal concept rooted in the common law, available only to married couples, that allows them to own property as a single, indivisible legal entity. This form of ownership is distinguished by its ability to protect the property from the claims of individual creditors, as neither spouse holds a divisible interest in the property that can be seized or encumbered. In essence, TBE transforms ordinary property ownership into something far more valuable and secure, much like the straw spun into gold in the Rumpelstiltskin tale.
Under TBE, both spouses are considered to hold the property “per tout,” meaning that each spouse is seized of (or owns) the whole estate, not merely a fractional part.[2] This indivisibility is the cornerstone of TBE’s protective features, as it ensures that the property generally remains immune to the claims of individual creditors[3] unless both spouses are jointly liable. This is a significant departure from joint tenancy with rights of survivorship (JTWROS), under which each owner during his or her lifetime holds a distinct share as “per my” that can be alienated or subjected to creditor claims.[4]
• TBE Under Common Law — Under Florida common law, the creation of TBE is dependent on the presence of six unities: possession, interest, title, time, survivorship, and marriage.[5] The unity of possession requires that both spouses have joint ownership and control over the property. The unity of interest requires that the interest in the property must be identical between the spouses (neither spouse having a greater or lesser interest than the other). The unity of title requires that the spouses’ interests in the property originate from the same legal acquisition of the property. The unity of time requires that the spouses’ interests must commence simultaneously. The unity of survivorship requires that upon the death of one spouse, the surviving spouse becomes the sole owner of the former TBE property interest. Finally, the unity of marriage requires that the parties are legally married to each other at the time the property is acquired and that the parties intend to own the asset as a singular marital asset.[6] If any one of the aforementioned unities is not present, then TBE ownerships is not created under common law.
• TBE Characteristics — TBE property has several features and attributes that are mostly unique to the TBE form of ownership. Upon the death of the first spouse to die, TBE property remains whole and unbroken with the deceased spouse’s interest terminating and the surviving spouse remaining as the sole owner by operation of law.[7] Each spouse owes a duty of loyalty and care to the other spouse when transacting with TBE property, and, as such, both remain accountable to each other.[8] TBE property is for the benefit of the marital unit and not an individual spouse.[9] Pursuant to the non-severability doctrine, TBE property cannot be partitioned, severed, encumbered, or transferred without the consent of both spouses, thereby ensuring that one spouse may not unilaterally dispose of the property.[10] If one spouse transfers the property without the consent of the other spouse, the property’s TBE character will follow the property.[11] Finally, TBE property is exempt from the individual creditors of either spouse, offering a creditor protection benefit that other forms of joint ownership lack.[12]
However, the creditor protection afforded to TBE property is not absolute. First, TBE property may be reached by a creditor holding a joint judgment against both spouses.[13] Second, the TBE exemption vanishes, naturally, the moment a TBE severance occurs, such as upon death or divorce. Third, Florida’s TBE exemption does not extend to the Internal Revenue Service, which may pursue the debtor-spouse’s interest in TBE property to satisfy federal tax obligations.[14]
While TBE provides a golden shield, certain circumstances[15] can sever this protection, converting the property to ordinary ownership. Understanding the conditions under which TBE can be severed is essential for maintaining its protective features. TBE will be severed upon the death of a spouse. Upon the death of one spouse, the surviving spouse automatically becomes the sole owner of the property, thereby ending the TBE ownership.[16] This change exposes the property to the survivor’s creditors as the property is no longer TBE because there is no longer a joint tenancy.[17] TBE will also be severed upon divorce. Under F.S. §689.15, upon the dissolution of marriage the property will thereafter be held as tenants in common between former spouses.[18] Spouses can also mutually decide to unravel the golden thread of TBE. Such agreement may be in the form of a written agreement[19] or an inferred agreement from the actions jointly taken by the spouses.[20] Finally, intentional acts inconsistent with the principles of TBE can result in severance. For example, TBE will be severed if one spouse conveys to, and the other spouse accepts, the sole interest in the asset,[21] or if one spouse murders or abuses the other spouse.[22]
• TBE Federal Taxation — For federal income tax purposes, one half of the income from TBE property is properly attributed to each spouse.[23] When spouses file a joint tax return, all of the TBE income tax attributes will be reported thereon. When spouses file separately, each spouse will report 50% of the income tax attributes on his or her separate income tax return.
For federal gift tax purposes, when one spouse establishes TBE property in favor of both spouses, it is presumed that the transferring spouse has made a gift of 50% of the property’s interest to the other spouse.[24] Provided the donee spouse is a U.S. citizen, the gift qualifies for the unlimited marital deduction, eliminating any immediate gift tax consequences.[25] However, if the donee spouse is not a U.S. citizen, the gift may be subject to gift tax to the extent the gift is considered completed and the value of the transferred 50% interest exceeds the annual exclusion for gifts to non-citizen spouses (currently $190,000, indexed for inflation).[26] If the TBE gift to a non-citizen spouse involves real property, special rules apply, deferring the gift’s completion until either 1) the donor spouse’s death or 2) a lifetime termination event, such as divorce or the property’s sale or division.[27] For personal property, however, the gift is deemed complete immediately upon re-titling the asset as TBE, as the non-citizen spouse gains a present ownership interest.[28] A gift of TBE property to a third party will generally constitute a gift from each spouse of 50% of the interest transferred.[29]
For federal estate tax purposes, the inclusion of TBE property in the gross estate is governed by I.R.C. §2040. The aforementioned section provides that 50% of the value of TBE property is included in the decedent’s gross estate as a “qualified joint interest.” In Estate of Young v. Commissioner of Internal Revenue, 110 T.C. 297 (1998), the Tax Court confirmed that no fractional interest discount or lack of marketability discount applies to “qualified joint interest” property owned by a married couple.[30] The value included in a decedent’s gross estate is one half of the fair market value of the property on the decedent’s date of death.[31]
When the surviving spouse is a U.S. citizen, the unlimited marital deduction under I.R.C. §2056(a) eliminates estate tax on the decedent’s includible half of the property, deferring tax until the surviving spouse’s death. However, if the surviving spouse is not a U.S. citizen, the unlimited marital deduction does not apply under I.R.C. §2056(d). Instead, a qualified domestic trust must be established to defer estate tax; otherwise, estate tax is due immediately on the decedent’s includible half of the property. The surviving spouse, regardless of citizenship, receives a stepped-up basis in 50% of the asset while retaining the original basis in the remaining 50%.[32]
Real Property
Florida caselaw has established that real property acquired in the names of both spouses creates a presumption of TBE property unless expressly stated otherwise[33] and such presumption is not rebuttable, absent fraud.[34] Any interest in real property, including a life estate[35] and a remainder interest,[36] may be owned as TBE property.
Florida statutorily eliminated the common law requirement of unity of time and title as it pertains to the creation of TBE real property, and thereby permits TBE creation from a conveyance by a donor to the donor and the donor’s spouse.[37] Additionally, the Florida Statutes create a presumption that a mortgage made or assigned to spouses is TBE “unless a contrary intention appears in such mortgage or assignment.”[38]
Personal Property
Personal property, whether tangible or intangible, may also be spun into gold through TBE ownership in Florida, though the process of creating TBE for personal property is more complex than for real property.[39]
• Bank Accounts — The application of TBE to a bank account[40] is particularly relevant given how frequently couples hold joint accounts, making it essential to understand the presumptions that arise based on the particular situation.[41] Under F.S. §655.79, a bank account in the name of a married couple is considered TBE unless otherwise specified in writing. The statute provides a presumption of TBE, making it easier for married couples to enjoy the benefits of TBE for their bank accounts; however, it is unclear whether the statute eliminated the requirement of common law unities to create TBE or merely created a presumption of TBE ownership if the unities of possession, interest, title, time, and survivorship are present.[42] The issue of whether the common law unities are necessary when an account is expressly designated as TBE is on appeal to the Florida Supreme Court.[43]
Beal Bank SSB v. Almand & Associates, 780 So. 2d 45 (Fla. 2001), is the leading case on TBE ownership of personal property, including bank accounts. In Beal Bank, the Florida Supreme Court established a framework for determining whether bank assets are held as TBE. The decision set forth three key presumptions: 1) Conclusive Presumption of TBE — If the common law unities are present and the account is expressly designated as TBE, then a conclusive presumption arises that the bank account is TBE; 2) Rebuttable Presumption of TBE — If the common law unities are present, TBE is not expressly disclaimed, and the form of ownership designation is either silent or listed as JTWROS, then a rebuttable presumption arises that the bank account is TBE; and 3)Presumption Against TBE — If the common law unities are present but TBE is expressly disclaimed in writing[44] and another form of ownership is selected: a) If the financial institution does not offer or precludes TBE titling, a rebuttable presumption arises that the bank account is not TBE,[45] b) If the financial institution offers TBE titling, a conclusive presumption arises that the bank account is not TBE.[46]
The Beal Bank decision clarified the default treatment of jointly-held bank accounts and provided much needed guidance for couples seeking to structure their accounts as TBE.
• Other Personal Property — In addition to the presumptions for bank accounts, Beal Bank established a “presumption in favor of a [TBE] when a married couple jointly owns personal property.”[47] The presumption “shift[s] the burden to the creditor to prove by a preponderance of evidence that [TBE] was not created.”[48] Thus, if the unities of possession, interest, title, time, and survivorship are present at the time a married couple jointly acquires an asset, there is a rebuttable presumption of TBE ownership.
Tangible personal property including, but not limited to, artwork,[49] jewelry,[50] and household furnishings,[51] may be owned as TBE property. Vehicles and mobile homes are owned as TBE property if the conjunction “and” is used on the title between the names of the spouses;[52] if instead the conjunction “or” is used in the titling, then the ownership will be JTWROS and not TBE property.[53]
Intangible personal property including, but not limited to, investment accounts,[54] brokerage accounts,[55] stock certificates,[56] partnership interests,[57] limited liability company (LLC) membership interests,[58] promissory notes,[59] certificates of deposit,[60] bonds,[61] tax refunds,[62] and checks payable to spouses[63] may be owned as TBE property.
The creation of TBE for personal property is not as straightforward as it is for real property since many types of personal property do not have documentation indicating the type of joint ownership. Therefore, couples should ensure all six common law unities are present and expressly designate TBE ownership or clearly document the intent to create TBE ownership for personal property.
TBE Trusts
The question of whether TBE status can be maintained when property is transferred into a joint trust remains unresolved, with courts offering conflicting decisions. In In re Romagnoli, 631 B.R. 807, 809 (Bankr. S.D. Fla. 2021), the court found that TBE property contributed to a joint trust retained its TBE character, protecting it from the reach of individual creditors. In Passalino v. Protective Group Securities, Inc., 886 So. 2d 295, 297 (Fla. 4th DCA 2004), and Snyder v. Dinardo, 700 So. 2d 726 (Fla. 2d DCA 1997), courts found that proceeds of TBE property that were deposited into an attorney’s trust account and an escrow account, respectively, maintained their TBE status, further supporting the argument that TBE can survive certain transfers into trusts. In contrast, other cases, such as In re Givans, 623 B.R. 635 (Bankr. M.D. Fla. Sept. 30, 2020),[64] and Rollins v. Alvarez, 792 So. 2d 695 (Fla. 5th DCA 2001), have concluded that the transfer of TBE property into a trust severs the TBE status, leaving the property vulnerable to creditor claims. These conflicting decisions highlight the uncertainty surrounding TBE trusts, creating a challenging environment for estate planners and their clients.
Establishing the TBE Presumption
In Beal Bank, the Florida Supreme Court established a TBE presumption for all personal property when the six unities are present and there is no expressed disclaimer of TBE. Nonetheless, proving the presence of the six unities remains challenging because personal property “is generally not under mandate of record; it may easily be passed by either spouse without mutual consent and without knowledge of the other spouse; [and] it may change hands with great frequency.”[65] Therefore, the safest way to evoke the TBE presumption for personal property is with “competent substantial evidence” that the unities were present.[66]
Written documentation in the form of an affidavit, ownership agreement, and/or assignment is “competent substantial evidence” sufficient to establish the six unities. Florida caselaw supports the concept of TBE agreements and TBE assignments by recognizing that written agreements, including nuptial agreements, can establish the intent of the parties and control the characterization and treatment of assets.[67]
• TBE Financial Account Affidavit — A TBE financial account affidavit (TBE affidavit) can be executed when opening a financial account at an institution that does not offer or permit TBE account ownership. The TBE affidavit should state that at the time the account was opened, the six unities were present, the financial institution did not offer or permit TBE account ownership, and the spouses intend for the account to be TBE. The TBE affidavit should be executed with the same formalities as an ordinary affidavit.
The TBE affidavit is particularly useful for spouses establishing a financial account at an institution that does not offer TBE accounts. By documenting the spouses’ intent to hold the account as TBE, the affidavit can help establish the six unities required for TBE ownership as of the account’s inception. While the TBE affidavit may be executed at any time, it is advisable to execute it in close proximity to — if not contemporaneously with — the opening of the account. This ensures that the intent to create TBE ownership is clearly established and minimizes the risk of disputes regarding the account’s classification.
• TBE Ownership Agreement — A TBE ownership agreement (TBE agreement) can be executed by spouses before or after marriage. The TBE agreement should state the spouses’ intent to own assets as TBE and provide a list of the assets to which the TBE agreement will be applicable. The TBE agreement may address property acquired pre- or post-marriage, as well as the intended ownership of future assets acquired after the execution of the TBE agreement.
• TBE Assignment — A TBE assignment of personal property (TBE assignment) can be executed by spouses any time after they are legally married to one another. The TBE assignment should state the spouses’ intent to own personal property as TBE and convey specified personal property from the spouses in their individual capacities to the spouses as TBE.
Proper timing of execution is critical for spouses seeking to transform premarital assets into TBE property, as certain legal unities must be present for TBE ownership to exist. A TBE agreement executed before marriage (potentially as part of or incorporated into a prenuptial agreement) can establish the intended ownership structure of assets acquired after the marriage and may outline the treatment of premarital assets. However, a TBE agreement alone is generally insufficient to reclassify premarital assets as TBE property.[68] To transform premarital assets into TBE, the spouses must execute a TBE assignment after marriage.[69] This is necessary because the unity of “marriage” does not exist prior to legal marriage, and without it, the unities of “time” and “title” required for TBE ownership also would be absent. If the TBE agreement is executed after marriage, the agreement can address post-marriage asset ownership and transform premarital assets into TBE property simultaneously. In such cases, the TBE agreement and the TBE assignment can be combined into a single document, as all six unities required for TBE ownership — including the unity of marriage — are present at the time of execution. This streamlined approach can ensure that the parties’ intent is clearly documented and legally enforceable while minimizing the potential for disputes over asset classification.
As part of the TBE assignment process, spouses may choose to use a strawman — a third-party intermediary — to facilitate the transfer of assets into TBE ownership. The strawman temporarily takes title to the property and then reconveys it to the spouses in the desired TBE form, ensuring that all six unities are satisfied. While the use of a strawman can provide an additional layer of certainty that the unities are satisfied, it does not appear to be necessary under Florida law.[70] Courts primarily focus on the intent of the spouses to establish TBE ownership and the presence of the six unities at the time of transfer.[71] As long as these elements are satisfied, the execution of a TBE assignment without the involvement of a strawman should be effective.[72]
Conclusion and Practice Tips
In the tale of Rumpelstiltskin, the miller’s daughter not only spun straw into gold, but ultimately saved herself by learning the mysterious figure’s name. Her triumph illustrates a universal truth: Knowledge is power. For Florida spouses, understanding the intricacies of TBE serves a similar function. By equipping themselves with knowledge of TBE’s requirements, benefits, and risks, couples can transform their property into a secure marital asset and safeguard their financial future.
To utilize TBE effectively, couples and their advisors must understand how TBE operates, including its protection from individual creditors and its survivorship feature. Advisors and spouses should begin by reviewing all assets to determine which are already owned as TBE and which should be reclassified. However, before reclassifying assets as TBE, spouses should carefully evaluate whether doing so aligns with their financial and legal objectives, as the transformation can have significant legal consequences beyond creditor protection, particularly in family law and estate planning. For family law purposes, converting separate property into TBE creates a presumption that the asset is marital property,[73] potentially subjecting it to equitable distribution in divorce proceedings.[74] Additionally, because TBE presumes joint ownership, transferring solely owned property into TBE may be treated as a gift of 50% of the interest to the other spouse, which could have gift tax consequences — either at the time of the transfer or upon divorce — if the donee spouse is not a U.S. citizen.
For personal property, the six unities must be satisfied to create TBE ownership with certainty. Determining asset ownership can be challenging, particularly with financial institutions, and requesting and reviewing the signature card is often the best practice to clarify ownership. Until Florida law provides more certainty, TBE trusts should be avoided. Practitioners also should caution spouses that actions inconsistent with TBE — whether intentional or inadvertent — may terminate this protective ownership. Additionally, titling vehicles jointly or as TBE should generally be avoided, as it creates potential joint liabilities.
When possible, assets should be designated as TBE on account titles, agreements, and instruments such as stocks, bonds, LLC membership interests, and promissory notes. For accounts at institutions that do not formally offer or allow TBE ownership, spouses must confirm the six unities are present and should execute a TBE affidavit to memorialize their intent. Similarly, TBE agreements and TBE assignments can help establish premarital or post-marital personal property as or convert such property to TBE. These documents should include detailed lists of assets, the desired treatment for those assets, and provisions for the treatment of future acquisitions regardless of titling.
Fraudulent transfer laws, however, present an important limitation.[75] While TBE ownership offers robust creditor protection, it does not shield transfers from scrutiny under Florida’s fraudulent transfer statutes.[76] Advisors should assess spouses’ solvency and have them execute a financial affidavit of solvency before reclassifying assets as TBE. Fortunately, transferring TBE property from one spouse to the other or to a third party generally does not constitute a fraudulent transfer, as TBE property is exempt from individual creditors before the transfer.[77] In cases in which one spouse is a debtor, transferring TBE property to the non-debtor spouse and updating the non-debtor spouse’s estate plan to include creditor-protected trusts for the debtor spouse can enhance overall asset protection.
Real property deeds should include language such as “husband and wife” or “tenants by the entirety” to ensure TBE ownership, especially for couples with different last names. If property was acquired before marriage or ownership is unclear, executing a new deed to confirm TBE status is advisable. For any financial accounts, whether bank accounts or investment accounts, it is often safer to close old accounts and open new ones jointly as TBE to avoid disputes regarding the six unities. Adding a spouse to an existing bank account carries risks due to inconsistent caselaw. If a financial institution does not allow TBE accounts, spouses can attempt to add “TBE” to the signature card or after their name when signing, but the better practice is to open an account at a financial institution that explicitly permits TBE. Executing a TBE affidavit adds further evidence of the couple’s intent and the presence of the six unities for the account.
For personal property, whether tangible or intangible, spouses should use a strawman and/or execute a TBE agreement and TBE assignment to establish TBE ownership with certainty by ensuring compliance with the six unities. While the strawman approach is the most prudent for ensuring compliance, it may not always be necessary if a properly executed TBE assignment is used.
Just as the miller’s daughter secured her future with the knowledge of Rumpelstiltskin’s name, Florida spouses and their advisors can achieve the golden protection of TBE through a well-informed and strategic approach. With tools such as TBE affidavits, TBE agreements, and TBE assignments, couples can navigate the complexities of TBE ownership with confidence. This proactive planning ensures their assets remain secure, their intent is honored, and their financial future is safeguarded against unforeseen challenges. Knowledge, as always, is the most valuable asset.
[1] Fla. Stat. Ch. 736, Part XV, allows married couples to create community property by transferring assets to a Florida community property trust. See Joseph M. Percopo, Understanding the New Florida Community Property Trust, Part I, 96 Fla. B. J. 16 (Jul./Aug. 2022); I.R.C. §1014(b)(6).
[2] Beal Bank SSB v. Almand & Assocs., 780 So. 2d 45 (Fla. 2001).
[3] Exceptions to this general rule will be discussed below.
[4] Beal Bank SSB, 780 So. 2d at 53.
[5] Id. at 52.
[6] The intent to create TBE does not necessarily require explicit knowledge of the TBE doctrine, but rather an intention to take ownership as one indivisible unit. See Kowalski v. Rosenbaum, 255 So. 3d 963, 966 (Fla. 2d DCA 2018) (finding the “testimony indicate[d] that the parties were not intending to each own the whole of the money but rather that they each intended to own a divisible part of the money”).
[7] Bailey v. Smith, 103 So. 833 (Fla. 1925) (“Upon the death of one spouse the entire estate goes to the survivor, but the survivor takes no new estate, since there is a mere change in the person holding, and not an alteration in the estate held.”).
[8] Anderson v. Carter, 100 So. 2d 831, 833 (Fla. 2d DCA 1959) (“Either spouse presumptively has the power to act for both,…provided the fruits or proceeds of such action inure to the benefit of both and the estate is not terminated. But neither may…convert it or a part of it, in bad faith, into one in severalty.”) (quoting Madden v. Gosztonyi Sav. & Trust Co., 1938 200 A. 624, 630 (Pa. 1938)); Joseph v. Chanin, 940 So. 2d 483, 486 (Fla. 4th DCA 2006) (“One joint tenant may bring a conversion action against another joint tenant who wrongfully appropriates more than his share of the money from a joint tenancy account.”). See also W. Fletcher Belcher, Jointly Held Property, Litigation Under Florida Probate Code, Ch. 5 (Fla. Bar CLE 2023) (“Spouses are fully accountable to each other for any [TBE] property” and “[e]ach [spouse] owes to the other the highest degree of confidence and trust.”).
[9] Passalino v. Protective Grp. Sec., Inc., 886 So. 2d 295, 298 (Fla. 4th DCA 2004) (“The money was held for their use and benefit, and only they could direct its disposition.”).
[10] Douglass v. Jones, 422 So. 2d 352, 354-55 (Fla. 5th DCA 1982) (“It is well settled in Florida that an estate by the entireties is vested in the husband and wife as one person, and neither spouse can sell, forfeit, or encumber any part of the estate without the consent of the other, nor can one spouse alone lease it or contract for its disposition without such consent.”); U.S. v. One Single Family Residence With Outbuildings Located at 15621 S.W. 209th Ave., Miami, Fla., 894 F.2d 1511, 1514 (11th Cir.1990) (“[E]ach spouse’s interest comprises the whole or entirety of the property and not a divisible part; the estate is inseverable.”).
[11] Sitomer v. Orlan, 660 So. 2d 1111, 1113 (Fla. 4th DCA 1995) ( “[T]he nonseverability doctrine preserves the entireties status of funds even after one spouse renames an account or transfers money from it without the consent of the other.”); Berlin v. Pecora, 968 So. 2d 47 (Fla. 4th DCA 2007) (“Once tenancy by the entirety property is established, its subsequent transfer to another asset does not terminate the unities of title or possession.”); Branch Banking & Trust Co. v. Maxwell, 2012 WL 4078407 at 3 (Bankr. M.D. Fla. 2012) (“[U]nder [the] non-severability doctrine, the indivisibility of funds in a TBE bank account preserves the TBE status of the funds even after one spouse renames an account or transfers money from it without the consent of the other.”); Lerner v. Lerner, 113 So. 2d 212 (Fla. 2d DCA 1959) (finding wife had maintained TBE interest in corporate stock issued solely in husband’s name since husband used TBE funds to acquire the stock and there was no agreement to terminate the TBE ownership); Anderson, 100 So. 2d at 833 (“But neither [spouse] may by such action destroy the true purpose of [TBE] by attempting to convert it or a part of it, in bad faith, into one in severalty.”) (quoting Madden v. Gosztonyi Sav. & Trust Co., 1938 200 A. 624, 630 (Pa.1938)); Wallace v. Torres-Rodriguez, 341 So. 3d 374 (Fla. 3d DCA 2022) (imposing a constructive trust over TBE assets improperly conveyed by one spouse to a third party). However, in Grossfeld v. Security National Mortgage Company, 389 So. 3d 726 (Fla. 3d DCA 2024), the court held that surplus funds after a foreclosure sale on TBE property lost its TBE status and 50% of the proceeds were available to the husband’s creditor. The court stated that “once the property was sold in the foreclosure sale…the property was severed from the unities required for the property to retain its tenancy by entirety protections.” Grossfeld, 389 So. 3d at 728. In reaching its conclusion, the court did not explain how there was a severance and seemingly ignored application of the non-severability doctrine and pre-existing caselaw.
[12] Beal Bank SSB, 780 So. 2d at 53 (“[W]hen property is held as a tenancy by the entireties, only the creditors of both the husband and wife, jointly, may attach the tenancy by the entireties property; the property is not divisible on behalf of one spouse alone, and therefore it cannot be reached to satisfy the obligation of only one spouse.”). Protection even extends to remainder interests owed as TBE property. Sunshine Res., Inc. v. Simpson, 763 So. 2d 1078 (Fla. 4th DCA 1999).
[13] Williams v. M & R Constr. of N. Fla., Inc., 305 So. 3d 353, 354 (Fla. 1st DCA 2020) (“[T]he creditor or creditors seeking to levy the property must have a joint debt owed by both spouses. This is so because the ‘[p]roperty held by a married couple as tenants by the entireties belongs to neither spouse individually.’ In re Hinton, 378 B.R. 371, 377 (Bankr. M.D. Fla. 2007).”); In re Davis, 403 B.R. 914 (Bankr. M.D. Fla. 2009) (holding that creditor with judgments against wife for a fraudulent transfer and husband from a separate proceeding years earlier was prohibited from collecting against TBE property because “[t]wo separate judgements do not create a joint debt”).
[14] U.S. v. Craft, 535 U.S. 274 (2002) (“We therefore conclude that respondent’s husband’s interest in the entireties property constituted ‘property’ or ‘rights to property’ for the purposes of the federal tax lien statute. We recognize that Michigan makes a different choice with respect to state law creditors: ‘[L]and held by husband and wife as tenants by entirety is not subject to levy under execution on judgment rendered against either husband or wife alone.’…But that by no means dictates our choice.…As we elsewhere have held, ‘exempt status under state law does not bind the federal collector.’”).
[15] Branch Banking & Trust, 2012 WL at 3 (“Once established, the only way to terminate TBE is (1) by the death of one spouse, (2) divorce, (3) if both spouses convey the property to a third party, or (4) if one spouse conveys the property to the other spouse.”).
[16] Miller v. Mobley, 186 So. 797, 798 (Fla. 1939) (“It follows that under this state of facts and the legal principles applicable thereto on the death of [husband] the entire title became vested in his surviving wife under the law as to estates held by the entireties.”); Kelly v. Spain, 160 So. 3d 78, 85 (Fla. 4th DCA 2015) (“‘When one of the tenants by the entirety dies, the surviving tenant receives no new or greater estate than already possessed, but the interest of the deceased tenant ceases.’”) (quoting Lopez v. Lopez, 90 So. 2d 456, 458 (Fla.1956)).
[17] Rader v. First Nat’l Bank in Palm Beach, 42 So. 2d 1 (Fla. 1949) (holding that property determined to no longer be TBE by actions of the spouses was therefore part of the deceased spouse’s estate); Ciungu v. Bulea, 162 So. 3d 290 (Fla. 1st DCA 2015) (finding that upon husband’s death, wife became the sole owner, and upon wife’s death the interest passed as part of her estate). While not expressly addressed in the opinions, such findings render the property subject to estate creditors.
[18] “[I]n cases of estates by entirety, the tenants, upon dissolution of marriage, shall become tenants in common.” Fla. Stat. §689.15. See also Powell v. Metz, 55 So. 2d 915, 916 (“[T]he moment the [divorce] decree became effective the parties by operation of the statute became tenants in common, each entitled to one-half….”); Demorizi v. Demorizi, 851 So. 2d 243 (Fla. 3d DCA 2003).
[19] Sheldon v. Waters, 168 F.2d 483, 485 (5th Cir. 1948) (“Divorce or death will end such a tenancy, and so may both parties by an agreement to do so. If they plainly agree on a division of the proceeds of a sale, their agreement will be effectuated and the agreed part of each will be his or her separate property.”).
[20] Rader, 42 So. 2d at 1 (finding that spouses’ actions, ordering sale and purchase of separate bonds, severed the TBE ownership so upon wife’s death her bonds did not pass to husband and were part of her estate); Vining v. Martyn, 726 So. 2d 336 (Fla. 4th DCA 1999) (holding that wife’s permission for husband to use TBE funds as pledge for husband’s sole debt acted to sever the TBE nature of the account).
[21] Hunt v. Covington, 200 So. 76, 77 (Fla. 1941) (“The conveyance in this case evidenced the intent of the parties to divest the husband of all interest which he had in the property and to vest the fee-simple title in the wife as her separate property subject to being held or disposed of by her.”).
[22] Fla. Stat. §732.802(2) (murder); Fla. Stat. §732.8031(2) (abuse of vulnerable adult); Eichman v. Paton, 393 So. 2d 655 (Fla. 1st DCA 1981) (finding that TBE property could be partitioned after abusive actions by husband which terminated the TBE ownership). At least one case concluded that a foreclosure sale resulted in the severance of the TBE nature of the foreclosed asset. Grossfeld v. Sec. Nat’l Mortg. Co., 389 So. 3d 726 (Fla. 3d DCA 2024). However, the decision did not address how a severance occurred in light of the non-severability doctrine.
[23] Bacher v. Comm’r, 36 T.C.M. (CCH) 363 (T.C. 1977) (“The Commissioner concludes that because both husband and wife own an equal and indivisible part of tenancy by the entirety property, and of the income derived from such property, such income is equally attributable to both spouses.”); Cox v. C.I.R., T.C. Memo. 1993-326, 1993 WL 27368 (July 22, 1993) (“[I]ncome realized from a Missouri tenancy by the entirety was taxable one-half to the husband and one-half to the wife”).
[24] Fla. Stat. §61.075(6)(a)(2)-(3); Sorgen v. Sorgen, 162 So. 3d 45 (Fla. 4th DCA 2014) (holding that “commingling of the wife’s one-third interest in the proceeds from the sale of the home in the parties’ joint account created a presumption that the wife gifted an undivided one-half interest in the funds to the husband”).
[25] I.R.C. §2523(a).
[26] I.R.C. §2523(i). A gift to a noncitizen spouse may require the filing of a gift tax return.
[27] Treas. Reg. §25.2523(i)-2(b).
[28] Treas. Reg. §25.2523(i)-2(c).
[29] I.R.C. §2511; Treas. Reg. §25.2511-1. However, even when the marital deduction applies, taxpayers must carefully structure transfers, as courts prioritize substance over form in determining the true donor and donee of a gift. In Smaldino v. Commissioner, T.C. Memo 2021-127 (T.C. 2021), the Tax Court disregarded the transaction’s formal steps and ruled that the husband, not the wife, was the true donor. The court recharacterized the transfer as an indirect gift to the trust, rejecting the argument that the gift was first made tax-free to the wife or that she subsequently acted as the donor.
[30] See also Est. of Mellinger v. Comm’r, 112 T.C. 26 (1999); Baillie v. Raoul, 137 N.E. 3d 240 (Ill. App. Ct. 4th 2019).
[31] In re Est. of Young, 110 T.C. 297 fn. 14 (1998) (“Similarly, [§]2040(b) also provides its own rules. It provides that the value included in the gross estate is ‘one-half of the value of such qualified joint interest.’ Once the parties have determined the value of the qualified joint interest, then this is merely divided in half to determine the amount included in decedent’s gross estate.”).
[32] I.R.C. §1014.
[33] Beal Bank SSB, 780 So. 2d at 54 (“Where real property is acquired specifically in the name of a husband and wife, it is considered to be a ‘rule of construction that a tenancy by the entireties is created, although fraud may be proven.’”) (quoting First Nat’l Bank v. Hector Supply Co., 254 So. 2d 777, 780 (Fla. 1971)); Ramos v. Est. of Ramos, 329 So. 3d 172, 173 (Fla. 3d DCA 2021) (“Thus, ‘[a] conveyance to spouses as husband and wife creates an estate by the entirety in the absence of express language showing a contrary intent.’”) In re Estate of Suggs, 405 So. 2d 1360, 1361 (Fla. 5th DCA 1981) (citing Losey v. Losey, 221 So. 2d 417 (Fla. 1969)).”).
[34] Bridgeview Bank Grp. v. Callaghan, 84 So. 3d 1154 (Fla. 4th DCA 2012).
[35] Clemons v. Thornton, 993 So. 2d 1054 (Fla. 1st DCA 2008).
[36] Sunshine Res., Inc. v. Simpson, 763 So. 2d 1078 (Fla. 4th DCA 1999).
[37] Fla. Stat. §689.11(1). See also Clampitt v. Wick, 320 So. 3d 826, 831 (Fla. 2d DCA 2021) (“‘Florida statutorily eliminated the need to use a straw person to satisfy the unities of time and title when creating tenancies by the entireties as to real property with the amendment of F.S. §689.11(1). Ch. 71-54 §1, Laws of Fla.’”) (quoting Jeffrey A. Baskies, et al., Joint Ownership, in Basic Estate Planning in Florida, §7.3(A) (Fla. Bar. CLE 10th ed. 2020)); Simon v. Koplin, 159 So. 3d 281, 282 (Fla. 2d DCA 2015) (“The supreme court in LaPierre clarified that the unities of possession, interest, title, and time are required to create a true joint tenancy. However, LaPierre has no bearing on this case as the right of survivorship here does not depend on the nature of the tenancy but on the express provision in the deed.”) (Internal citations omitted).
[38] Fla. Stat. §689.115.
[39] Beal Bank SSB, 780 So. 2d at 54 (“Unlike real property titled in the name of both spouses that is presumptively considered to be a tenancy by the entireties as long as the other unities are established, our jurisprudence has treated bank accounts and other personal property differently.”).
[40] The term “bank account,” when used herein, refers only to “deposit accounts,” which are defined as “any deposit or account in one or more names including, without limitation, any certificate of deposit, time deposit, credit balance, checking account, interest-bearing account, non-interest-bearing account, individual retirement account (IRA), money market account, NOW account, transaction account, savings account, passbook account, joint account, convenience account, escrow account, trust account, custodial account, fiduciary account, deposit in trust, or Totten trust account.” Fla. Stat. §655.55(3)(b). Deposit accounts do not include investment or brokerage accounts, as Florida’s security laws are found in Fla. Stat. Ch. 517, not Fla. Stat. Ch. 655, which governs financial institutions and deposit accounts. Moreover, Florida statutes commonly differentiate between deposit accounts and investment or brokerage accounts. See Fla. Stat. §§678.5011(1), 679.1021(cc) & (ww), and 711.501(10).
[41] Fla. Stat. §655.79.
[42] The following cases found unities are not necessary: Versace v. Uruven, LLC, 348 So. 3d 610 (Fla. 4th DCA 2022); Hurlbert v. Shackleton, 560 So. 2d 1276 (Fla. 1st DCA 1990); In re Est. of Lyons, 90 So. 2d 39 (Fla. 1955) (receded from by Beal Bank on other grounds); Simon v. Koplin, 159 So. 3d 281 (Fla. 2d DCA 2015). The following cases found unities are necessary: Loumpos v. Bank One, 392 So. 3d 841 (Fla. 2d DCA 2024) (finding account was not TBE despite designation as TBE because common unities of time and title were not present); In re Aranda, 2011 WL 87237 (Bankr. S.D. Fla. 2011) (finding account was not TBE because common law unity of time was not present); Beal Bank, SSB v. Almand & Assocs., 710 So. 2d 608 (Fla. 5th DCA 1998), decision approved in part, quashed in part, 780 So. 2d 45 (Fla. 2001) (Florida Supreme Court declined to address whether an account was TBE where wife was later added, thereby leaving intact the Fifth District Court of Appeal ruling on the issue).
[43] The Second District Court of Appeal certified conflict between its decision in Loumpos and the Fourth District Court of Appeal’s decision in Versace as both cases involved the addition of a spouse to an existing bank account, thereby failing to meet the unities of time and title. A timely appeal was filed in Loumpos with the Florida Supreme Court. Loumpos v. Bank One, No. SC02024-1256 (Fla. filed Aug. 27, 2024).
[44] A disclaimer “may appear in any ‘[w]riting,’ including any written integrated document incorporated by reference into a signature card.” Storey Mountain, LLC v. George, 357 So. 3d 709, 715 (Fla. 4th DCA 2023).
[45] Wexler v. Rich, 80 So. 3d 1097 (Fla. 4th DCA 2012).
[46] Storey Mountain, LLC, 357 So. 3d at 709.
[47] Beal Bank, SSB, 780 So. 2d at 57. See also Gibson v. Wells Fargo Bank, N.A., 255 So. 3d 944 (Fla. 2d DCA 2018); Cacciatore v. Fisherman’s Wharf Realty Ltd. P’ship, 821 So. 2d 1251 (Fla. 4th DCA 2002); In re Uttermohlen, 506 B.R. 142, 146 (M.D. Fla. 2012), aff’d, 525 F. App’x 916 (11th Cir. 2013); In re Daniels, 309 B.R. 54, 59 (Bankr. M.D. Fla. 2004).
[48] Beal Bank, SSB, 780 So. 2d at 58.
[49] Robinson v. Robinson, 651 So. 2d 1271 (Fla. 4th DCA 1995).
[50] The unity of possession can be hard to establish in the context of jewelry. See Connell v. Connell, 93 So. 3d 1140 (Fla. 2d DCA 2012) (finding that jewelry designed for a man purchased by husband from spousal JTWROS account lacked unity of possession and was, therefore, not owned as JTWROS). The withdrawal from a JTWROS account terminates the “joint tenancy nature of the [funds] and severs the right of survivorship as to the funds withdraw.” Wiggins v. Parson, 446 So. 2d 169, 171 (Fla. 5th DCA 1984). If the funds to purchase jewelry were withdrawn from a TBE account, the outcome in Connell may have been different due to the non-severability doctrine and the principle that the ability of one spouse to unilaterally withdraw from a TBE account does not in and of itself negate the unity of possession. See Beal Bank, SSB, 780 So. 2d at 57 (“[T]he ability of either spouse to alienate the account individually was not dispositive proof that a tenancy by the entireties did not exist.”).
[51] In re Kossow, 325 B.R. 478 (Bankr. S.D. Fla. 2005).
[52] See generally AmSouth Bank of Fla. v. Hepner, 647 So. 2d 907 (Fla. 1st DCA 1994).
[53] See Fla. Stat. §319.22(2)(a)(1)(a); Xayavong v. Sunny Gifts, Inc., 891 So. 2d 1075 (Fla. 5th DCA 2005) (holding that use of “or” precludes ability to own vehicle as TBE property). Despite the ability of spouses to own an automobile as TBE property, spouses should avoid joint ownership due to Florida’s dangerous instrumentality doctrine, which causes anyone on the title to be liable for damages inflicted by the automobile. Joseph M. Percopo, Car Ownership and the Dangerous Instrumentality Doctrine, ActionLine (Spring 2022). The general recommendation is that only the primary driver be on the title to an automobile to limit asset exposure and prevent the creation of a “joint creditor” that can look to TBE property to satisfy claims.
[54] Wallace v. Torres-Rodriguez, 341 So. 3d 374 (Fla. 3d DCA 2022) (finding “all of the stock and cash in the Fidelity investments account” had retained TBE character).
[55] Branch Banking & Trust Co. v. Crystal Ctr., LLC, No. 8:15-CV-1462-T-30AAS, 2018 WL 1005351, at *6 (M.D. Fla. Feb. 2, 2018), report and recommendation adopted, No. 8:15-CV-1462-T-30AAS, 2018 WL 1000038 (M.D. Fla. Feb. 21, 2018) (“[T]he TD Ameritrade account is held as [TBE] and therefore out of…creditors’ reach.”).
[56] Cacciatore v. Fisherman’s Wharf Realty Ltd. P’ship, 821 So. 2d 1251 (Fla. 4th DCA 2002).
[57] Berlin v. Pecora, 968 So. 2d 47 (Fla. 4th DCA 2007).
[58] In re Romagnoli, 631 B.R. 807, 809 (Bankr. S.D. Fla. 2021).
[59] Vandenberg v. Wells, 721 So. 2d 453 (Fla. 5th DCA 1998).
[60] Norman v. Bank of Hawthorne, 321 So. 2d 1112 (Fla. 1st DCA 1975).
[61] Hurlbert v. Shackleton, 560 So. 2d 1276 (Fla. 1st DCA 1990).
[62] In re Kossow, 325 B.R. 478 (Bankr. S.D. Fla. 2005).
[63] Gibson v. Wells Fargo Bank, N.A., 255 So. 3d 944 (Fla. 2d DCA 2018).
[64] See also In re Quaid, 2011 WL 5572605 (M.D. Fla. Nov. 16, 2011) (holding that TBE status was terminated when TBE property was transferred to trust which only one spouse could access and control).
[65] First Nat’l Bank v. Hector Supply Co., 254 So. 2d 777, 780 (Fla. 1971).
[66] Beal Bank SSB, 780 So. 2d at 62 (“We point out that even without application of the presumption…there was competent substantial evidence in the form of the testimony…to support the trial court’s finding that [the personal property was TBE].”).
[67] See Forehand v. Peacock, 77 So. 2d 625, 626 (Fla. 1955) (finding that an agreement executed between a mother and daughter after receipt of a deed of property was “sufficient to create an agreement between the parties not to partition the property and to vest title thereof in the survivor to said agreement”); Hannon v. Hannon, 740 So. 2d 1181, 1187 (Fla. 4th DCA 1999) (“The [nuptial] agreement itself is intended to define the mutual equities [between the parties], and the trial judge is not free to ignore its provisions or to render them ineffective.”); Turchin v. Turchin, 16 So. 3d 1042 (Fla. 4th DCA 2009) (finding that marital agreement demonstrated the intent of the parties and controlled the characterization and treatment of assets); In re Newcomb, 483 B.R. 554, 559 (Bankr. M.D. Fla. 2012) (finding that “[p]roof of intent not to create tenancy by entirety property may be established by a prenuptial agreement”). But see Puleo v. Golan, 201 So. 3d 37, 45 (Fla. 3d DCA 2014) (holding that the “postnuptial agreement may govern their claims against each other, but it is not a protective mantle insulating their public corporate transactions and filings from liability to a judgment creditor for a fraudulent transfer”).
[68] In In re Golub, 80 B.R. 230 (Bankr. M.D. Fla. 1987), the debtor and the debtor’s spouse entered into a prenuptial agreement expressing an intent to create TBE ownership of premarital assets. Following their marriage, an assignment was executed to transfer premarital personal property into TBE that excluded household furnishings. The court held that the assets included in the assignment were TBE because the six unities were present, while the furnishings were not TBE since, without an assignment, the six unities could not be established despite the prenuptial agreement’s stated intent.
[69] In re Kossow, 325 B.R. 478 (Bankr. S.D. Fla. 2005) (holding that premarital property became TBE because all six unities were present at the time of the assignment after debtor and the debtor’s spouse entered into a prenuptial agreement expressing an intent to create joint ownership and, after marriage, executed an assignment of interest in premarital personal property); Golub, 80 B.R. 230 (holding that an assignment of premarital property executed after marriage pursuant to a prenuptial agreement converted the assigned personal property into TBE ownership); Green v. Casper, 346 So. 2d 1204 (Fla. 3d DCA 1977) (holding that property remained exempt as TBE property after spouses entered into a prenuptial agreement before remarrying, later executed a postnuptial agreement, and used a strawman to transfer and reconvey property back to themselves as TBE).
[70] Waterman v. Higgins, 10 So. 97, 99 (Fla. 1891) (“According to the stringent rules of the common law a conveyance from a husband directly to his wife, without the intervention of a trustee, is void….In equity, an examination will be made into the motives, considerations, and objects to be accomplished by such conveyances. If made upon good or meritorious considerations, and free from imposition or fraud, they are looked upon with favor, and upheld in chancery.”); Versace v. Uruven, LLC, 348 So. 3d 610 (Fla. 4th DCA 2022) (holding that a bank account was TBE where one spouse was later added as an account holder without the use of a strawman); Hurlbert v. Shackleton, 560 So. 2d 1276 (Fla. 1st DCA 1990) (holding that husband was able to transfer stocks and bonds to himself and wife and create TBE ownership without necessity of a strawman).
[71] Kossow, 325 B.R. 478; In re Golub, 80 B.R. 230 (Bankr. M.D. Fla. 1987); Green, 346 So. 2d 1204.
[72] In Ratinska v. Est. of Denesuk, 447 So. 2d 241 (Fla. 2d DCA 1983) (A mother conveyed property to herself and her son as JTWROS. The court held that the execution of the deed without a strawman was sufficient to meet the unities to create JTWROS. The court further stated that there “is no point in requiring [the] property be conveyed twice when a single conveyance is just as effective and has the virtues of economy and efficiency.”) See also Weisblat v. Feldman, 358 So. 3d 1238 (Fla. 4th DCA 2023); Countrywide Funding Corp. v. Palmer, 589 So. 2d 994 (Fla. 2d DCA 1991) (citing favorably the logic of Ratinska and applying it to the termination of JTWROS ownership). But see SE Prop. Holdings, LLC v. McElheney, 2016 WL 7494300 (N.D. Fla. May 7, 2016) (declining to address whether an LLC interest could be transferred from one spouse to both spouses to create TBE ownership, noting that the law was unclear and contradictory cases existed on the issue); Loumpos v. Bank One, 392 So. 3d 841 (Fla. 2d DCA 2024) (holding that adding a spouse to a financial account did not create TBE ownership, despite the parties’ expressed intent to establish TBE status).
[73] Fla. Stat. §61.075(6)(a)(2)-(3); Robertson v. Robertson, 593 So. 2d 491 (Fla. 1991) (“[The spouse] seeking to have the property declared a nonmarital asset now has the burden of overcoming this presumption by proving that a gift was not intended.”).
[74] Fla. Stat. §61.075(1) (“[T]he court must begin with the premise that the distribution [of marital property] should be equal, unless there is a justification for an unequal distribution….”).
[75] Fla. Stat. §§222.29-.30.
[76] See SE Prop. Holdings, LLC, 2016 WL 7494300; Clampitt v. Wick, 320 So. 3d 826, 831 (Fla. 2d DCA 2021).
[77] See Liberman v. Kelso, 354 So. 2d 137, 139 (Fla. 2d DCA 1978) (“In the absence of fraud, there would have been nothing to prevent Mr. Heinselman from conveying his interest in the property to appellee free of appellants’ lien prior to their divorce.”); Dean v. Heimbach, 409 So. 2d 157, 158 (Fla. 1st DCA 1982) (“[Debtor] could not legally defraud a creditor by transferring homestead assets, because those assets were beyond the creditor’s reach.”).
Joseph M. Percopo practices law in Orlando as a shareholder with Dean Mead. His practice concentrates on estate and trust planning, estate and trust administration, asset protection planning, business, and tax law. Percopo is a graduate of the Florida State University College of Law with highest honors and earned his LL.M. in taxation from the University of Florida Levin College of Law Graduate Tax Program. He is immediate past president of the Central Florida Estate Planning Council, as well as a former RPPTL section fellow and graduate of the Florida Fellows Institute of the American College of Trust and Estate Counsel.
The author dedicates this article to his parents, Maureen and Mario Percopo.
This column is submitted on behalf of the Real Property, Probate and Trust Law Section, John C. Moran, chair, and Allison Archbold and Homer Duvall, editors.
