Tuesday, May 3, 2016


In today’s society, creditors have become a part of everyday life. They can arise from lawsuits, medical expenses, bills and a multitude of other scenarios. It is for this reason that protection of one’s assets is essential. Although the concept is broad, at a base level, asset protection is the enactment of a plan that is intended to legally protect your assets from the claims of creditors.

Although many forms of asset protection can be complicated and expensive to implement, there are options available which are more affordable and less complex. One such method available in Florida is joint ownership of an asset with a spouse as tenancy-by-the-entirety (TBE).      

TBE is a type of co-ownership that is only available to married couples. In order for an asset to qualify for being titled as TBE, all of the following requirements must be met: 1) each spouse must have the same level of control and interest in the property, 2) they must have acquired control at the same time under the same instrument, 3) there must be a right of survivorship in the property, and 4) they must be married at the time the property became titled in their joint names, as TBE.

Once property is held as TBE, each spouse is deemed to be the owner of the entire interest of the property, and the property may not be transferred or alienated without the consent of both spouses. Since the property is not divisible without the consent of both spouses, a creditor of one spouse cannot attach property owned jointly by both spouses as TBE unless the claim arises against both spouses. Additionally, it is not an expensive or complicated process since it only requires the proper titling of assets and compliance with the above stated requirements.    

For example, husband and wife own property as TBE. Husband is later involved in a car accident, and is being sued. The person suing husband cannot attach a claim to the property owned as TBE, because the claim only arose against husband, and not wife.  

Although it provides a heightened level of protection, TBE is reliant on marriage. Thus, if the spouses get divorced, they will lose the protection that they receive from TBE, and the property will then be held as joint tenants with rights of survivorship or tenants in common. It is also important to note that TBE creditor protection will be lost if a spouse passes away.  

As described above, TBE is an extremely cost-effective, legally sound way that you can protect your assets from claims of creditors. It is therefore important to take a look at how your assets are titled, and strongly consider retitling property as TBE if the circumstances permit.     

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