Homestead and Entireties Question From Reader

A reader emailed invited me to post his emailed question on the blog:

"My homestead is located in a municipality and is greater than ½ acre (about .82 acres). I purchased the house before I was married (in 2002). Recently, after we had been married about 1 year and 5 months, we filed a quit claim deed so that my wife is now a joint owner of the house. From what I understand Florida law automatically considers this tenancy by the entireties ownership. If I was to receive a judgment against me, is my homestead protected from a forced sale (and distribution to the creditors of 39% of the proceeds) since it is also my wife’s homestead and she is a joint owner? In this situation, am I subject to any look back periods as far as when the ownership was changed? The reason it was changed so far after the wedding is that my wife lived separately from me to complete a residency program. The quit claim deed was filed the month that she moved in with me and the house became her primary residence"

Homestead is protected up to .5 acres in a municipality. Lots larger than .5 acres are protected proportionately. In this case, 61% of the house value is protected from creditors.(.82 size / .5 protected area) The wife had an automatic interest in the homestead upon marriage and before the husband quit claimed the title to he and his wife jointly. A non-owner spouse automatically has a life estate in the owner-spouse’s homestead which means the non-owner spouse is guaranteed the right to the house during her lifetime and after the death of the owner spouse. Prior to the conveyance to joint ownership and immediately upon the marriage, the owner spouse could not convey the full legal title to the homestead without his wife’s signature because she had a vested life estate interest.

The quit claim deed from husband to husband and wife is valid if both the husband and wife signed the deed even though the husband was the only spouse on title. If the wife received the deed, but did not sign the deed, the conveyance may be invalid subject to checking with a real estate attorney.

Assuming the husband and wife own the property jointly the full value is protected as tenants by entireties property. However, if the facts show that the husband was either insolvent or threatened with a lawsuit at the time of the quit claim deed then a creditor could attack the quit claim deed as a fraudulent conveyance. A creditor could argue fraudulent conveyance up to four years after the quit claim deed. The facts presented do not indicate any fraudulent intent.

In sum, the house is probably protected as entireties property and is protected as homestead up to 61% of the value.

posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida