The Benefits of Tenancies by the Entireties

When you buy a house, one thing to consider is how to own the house, if you are buying it with someone else. If that someone else happens to be a spouse, you’ll have another option—the option to purchase and title the home in both of your names, as a tenancy by the entirety, or TBE.

What is TBE Property?

To be considered TBE property, the property must be purchased at the same time, by married couples, and there must be some unity of interest in the property (that is, both parties must own an equal share of the property).

TBE property doesn’t have to be real property, like houses or land-it can be anything. For example, if you opened an investment account at a bank at the same time, and in the names of a husband and wife, that property would be TBE. The same goes for cars.

But because real property has titles and deeds, and because real property is one of the more valuable things any of us will ever own, TBE comes into play more often with real property than other forms of property ownership.

The Protections of a TBE

Owning something as TBE doesn’t affect divorces or property division related to a divorce. Whoever is supposed to get whatever, will still get it or not get it in a divorce, regardless of a property’s status as TBE.

What it does affect, and the biggest benefit to owning property as TBE, is a creditor’s inability to collect on or seize property that is owned as TBE.

TBE property is exempt from being taken by creditors (including in any bankruptcy case) to satisfy any debt that is incurred by just one of the spouses.

Proving TBE Status

Real estate is easy—there is a title or deed. But how do you know if other property is TBE property, and thus, exempt from creditors?

The good news is that you don’t have to prove that at all. The law presumes that if owners are married, and the property was acquired during the marriage, that the property is TBE property. The creditor can try to prove otherwise to try and collect on the property, but that’s their burden to prove.

Note that because most forms of a business do have someone listed as an owner, the TBE status of a business is not assumed or presumed; the organizational or founding documents for the company, or some other document, like a resolution, must document the intent for the business to be owned by both spouses.

Bank accounts are assumed to be TBE for married couples, so long as there is no paperwork that was filed when the account was opened, that contradicts the parties intentions to own the bank account as TBE property.

We can help you with asset protection estate planning or real estate closing needs. Call the West Palm Beach real estate lawyers at The Law Offices of Larry E. Bray today.

Sources:

floridabar.org/the-florida-bar-journal/trusts-tbe-or-not-tbe/

investopedia.com/terms/t/tenancy-by-the-entirety.asp