Same-Sex Marriage and Title Issues
Same-sex marriage has been legal in Florida since January. For newly married same-sex couples, this creates many changes, including in the worlds of asset protection and estate planning. One important issue to consider in this realm is how property is titled. This is especially important when dealing with high-value property, such as houses and other real property.
Tenancy In Common
Under Florida law, married couples presumptively hold both real and personal property as tenants by the entirety. This means that the spouses hold the property together, as a unified, single legal unit, rather than individually. Six characteristics, or unities, are needed to create a tenancy by the entirety:
- The spouses have equal and undivided ownership interests in the property;
- The spouses have equal rights to possess and to control the property;
- The parties were married at the time the property was acquired or created;
- The spouses’ interests originated from the same instrument or transfer;
- The spouses acquired their interests in the property at the same time; and
- The spouses have rights of survivorship in the property. This means that, upon one spouse’s death, the deceased spouse’s rights in the property automatically vest in the surviving spouse. The property cannot be devised by will or distributed in intestacy.
One major benefit of holding property as tenants by the entirety is asset protection. One spouse’s creditor may not encumber the property without the consent of both spouses. This means that the creditor may not seize or place a lien on the property unless both spouses owe on the same debt to that creditor.
Another aspect of tenancy by the entirety is that neither spouse may sell, mortgage, or otherwise alienate his or her interest in the property without the other spouse’s consent. Additionally, both spouses are equally entitled to any rents or profits resulting from the property.
Joint Tenancy With Right of Survivorship
Under old Florida law, when no same-sex marriage was allowed, same-sex partners would usually hold property as joint tenants with right of survivorship, which does not require marriage. Under this form of title, the co-owners would have a right of survivorship, as in a tenancy by the entirety.
However, there are two key differences. First, each co-owner under a joint tenancy has the right to alienate his or her interest and sever the joint tenancy, regardless of whether the other co-owner agrees. Secondly, a joint tenancy does not provide the same asset protection as a tenancy by the entirety. Each co-owner’s creditors may attach property held as joint tenants, whether or not the debt is owed by both owners.
What to Do
Newly married same sex couples may want to consider retitling their property as tenants by the entirety. A real estate attorney can assist in drawing up a deed transferring title to the spouses as tenants by the entirety.
For personal property that does not have a title, the process is not as clear. Newlywed couples may want to create new bank or brokerage accounts with both spouses’ names, then transfer assets into the new accounts. They may also want to have new stock certificates issued in both their names. It is wise to clearly indicate on any records that the couple is choosing to hold the property as tenants by the entirety. An attorney’s advice can be useful in determining the best course of action.
If you have taken advantage of Florida’s new same-sex marriage laws, or are simply a newlywed, you should consider, with the advice of an experienced attorney, the benefits of retitling your assets. Please contact the Law Offices of Larry E. Bray for an initial consultation.