Florida Supreme Court Issues Ruling on Creditor Claims Against Joint Bank Accounts

Married couples in Florida often hold title to real and personal property as tenants by the entirety. This is a form of joint property ownership. Essentially, each spouse holds an equal and undivided interest in the property. This means that one spouse dies, the other spouse automatically receives full title to the property without the need to go through probate.

Another advantage of holding assets as tenants by the entirety is that in many cases, a creditor holding a claim against just one spouse cannot seek to collect on that debt by going after the jointly owned asset. Now, this does not mean that all assets held as tenants by the entirety are automatically exempt. Florida common law has long required the presence of six conditions or “unities” to determine whether the property in question is exempt.

Statutory vs. Common Law Rule for Joint Spousal Accounts

Two of those six unities are unity of title and unity of time. Essentially, the asset in question must be acquired by both spouses together at the same time and they must hold title as joint owners from the beginning. In other words, you typically cannot “add” a spouse to an asset held by one spouse after the fact and then claim ownership as tenants by the entirety moving forward.

But in a recent decision, Loumpos v. Bank One, the Florida Supreme Court elaborated on an important exception to this general rule. In this case, a creditor obtained a default judgment against a then-single woman in 2003. Sometime later, the woman married. In 2017, the husband opened a bank account in his sole name. Several months after that, he and his wife executed new signature cards indicating they would now jointly own the account as tenants by the entirety.

A collection agency that acquired the 2003 default judgment against the wife later sought to garnish this joint account. The wife argued it was exempt from creditor collection. The creditor argued the protection for joint accounts did not apply as the “unities of time and title were not present.”

This dispute eventually made its way to the Florida Supreme Court. In 2001, the Court held in a different case, Beal Bank, SSB v. Almand & Associates, that bank accounts titled in the name of both spouses were presumed to be tenants by the entirety, even when the signature card did not explicitly state so. The Beal Bank decision, however, assumed both unities of time and title were present.

In the Loumpos case, the Court said Beal Bank did not apply since those unities were not present. That said, in 2008 the Florida legislature adopted an amendment to state law governing joint bank accounts which states, “Any deposit or account made in the name of two persons who are husband and wife shall be considered a tenancy by the entirety unless otherwise specified in writing.” Under that statutory amendment, the Court concluded a joint spousal bank account was a tenancy by the entirety even if, as in this case, the account was originally established by just one spouse.

Contact a Davie Creditor Lawsuit Lawyer Today

Determining the proper legal title to property can have a significant impact on the administration of a person’s estate after their death. This is why it is important to work with an experienced Davie creditor lawsuit attorney if you are involved in a dispute where this may be an issue. Contact Valero Law today at 305-607-7011 to schedule a free consultation. We serve clients in Davie, Broward County, Coconut Grove and Miami-Dade County.

Source:

scholar.google.com/scholar_case?case=8197054061129117432