Severing Estates by the Entirety in Florida

In Florida, a tenancy by the entirety is a form of property ownership which can only exist between a husband and wife. Under Florida law, when a married couple owns assets as tenants by the entirety, each spouse is said to own the property “per tout,” meaning that each spouse holds the whole or the entirety, and not a share or divisible part. Accordingly, property held by a husband and wife as tenants by the entirety belongs to neither spouse individually, but each spouse owns, in essence, an undivided 100% interest in the same asset. This may sound like mathematical nonsense because, of course, adding each spouse’s 100% ownership yields 200% ownership of the same asset. Nevertheless, the purpose of tenancies by the entirety is to grant each spouse an undivided right to the whole, even though property held by tenants in the entirety is beyond the exclusive control of either spouse.

One major consequence of this undivided right is that tenancies by the entirety generally cannot be reached to satisfy the obligations of just one spouse; only joint creditors of both the husband and wife may attach the tenancy by the entirety to execute on the established debt. Furthermore, because tenancies by the entirety cannot be divided, one spouse cannot defeat the other spouse’s rights in the property. But what happens to tenancies by the entirety when married couples divorce? Alternatively, what happens to this jointly held property if one spouse dies? How can the ownership of assets in tenancies by the entirety be dissolved?

Florida statutory law provides that, upon dissolution of marriage, assets held in tenancies by the entirety become property owned by the former spouses as “tenants in common.” Fla. Stat. § 689.15. Moreover, once a court issues a final judgment in a dissolution of marriage action, the couple’s ownership of the marital home or other furnishings is then considered to be a “tenancy in common”-a much different type of jointly owned asset. Fla. Stat. § 689.15. When property is held by unmarried individuals as tenants in common, unlike tenancies by the entirety, there is no ownership right conferred on the surviving tenant in common by the death of the other owner, or “tenant.” Fla. Stat. § 739.203. Therefore, the death of one tenant will cause that deceased tenant’s share to pass to the tenant’s designated beneficiaries or heirs.

Accordingly, couples seeking divorce should take care to ensure that the marital assets owned as tenancies by the entirety are retitled in accordance with any property settlement agreement, which typically does not provide for the ownership of such assets as tenants in common. Property settlement agreements, as opposed to marital settlement agreements, which address alimony and child custody issues, are typically entered into in contemplation of divorce and dictate how ownership of assets held as tenancies by the entirety will be divided once the divorce is finalized.

A tenancy by the entirety is generally characterized as joint asset ownership, pertaining solely to married persons, with rights of survivorship; assets that pass by survivorship right automatically pass to the surviving joint owner on the death of the decedent. Fla. Stat. § 739.203. As such, in the event of the death of one spouse, assets held in tenancies by the entirety will instantly pass to the other spouse, and the decedent’s estate usually has no interest in such an asset, as tenancies by the entirety are not included in the probate estate. Fla. Stat. § 739.203. For these reasons, it is important to consult an experienced attorney when questions or disputes arise with regard to to these types of jointly held assets.

If you or someone you know needs assistance dealing with the complexities of estate planning or administration, please do not hesitate to contact the legal team at Chepenik Trushin, LLP.