Careless Paperwork Can Forfeit Tenants By Entireties Protection

Another attorney told me about a hearing where his client, a judgment debtor, lost $4,000 he had held in a tenants by entireties account because the debtor failed to verify all the documents which were signed when he and his wife opened the bank account. The debtor and his wife together went to their bank to open a tenants by entireties checking account . They signed bank forms. Subsequently, they received written bank statements which were titled as husband and wife, tenants by entireties. A judgment was entered against the husband. The husband’s judgment creditor garnished the joint account, and the creditor issued a subpoena of all bank records regarding the account. The debtor’s attorney filed a motion to dissolve the writ of garnishment on the grounds that it was clearly titled as a tenants by entireties account. The court denied the motion and sustained the creditor’s writ of garnishment.

At the court hearing on the motion to dissolve the writ the judgment creditor produced the debtor’s bank signature card which had boxes to be checked corresponding to different forms of account ownership. On the signature card the only box checked was that for "joint tenants with rights of survivorship." There was a box for "tenants by entireties", but that box was not checked. The creditor argued that the debtors intended account ownership with survivorship, but not as tenants by entireties, because they chose to check the survivorship box in leave unchecked the entireties box. The debtor’s attorney argued that regardless of what box had been checked the bank account was titled as "tenants by entireties" and that the actual title take precedence over what appears on the account application.

The court held that the account was not a tenants by entireties account because the debtors intended to open an account with rights of survivorship based on what they checked on the account application. In my opinion, the debtors’ intent is ambiguous. The Florida Supreme Court has ruled that where the ownership of joint marital accounts is unclear the law presumes that married couples’ financial accounts, and other personal property, is owned tenants by the entireties. The debtor’s attorney is considering an appeal. The small amount of money at stake may prevent this case from being resolved by an appellate court.

This story illustrates how important it is for married couples to pay attention to details when they open financial accounts which they intend to be tenants by entireties accounts.

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