Tenancy by the Entirety in Divorce

March 11, 2015

An important aspect of divorce is the  property settlement. Determining what will happen to the family home is often the largest economic decision that a divorcing couple must make. One issue that will affect this determination is how the house is titled—whether both spouses together or one spouse alone owns the property.

In Florida, courts use the principle of  equitable distribution to determine how to divide property upon divorce. If spouses cannot agree upon a property settlement without a judge’s help, the court itself will make the decisions regarding how to fairly divide marital property. The court’s decisions will be binding even if one spouse or both disagree with the court’s division.

Tenancy by the Entirety

Under Florida law, any  real or personal property owned jointly by spouses is presumed to be held as a tenancy by the entirety. This includes any  bank accounts with both spouses’ names on them. Additionally, when spouses enter into a mortgage together, Florida law presumes that the property will be held as a  tenancy by the entirety unless otherwise specified. Holding property in a tenancy by the entirety means that the property is held by the spouses together as a single legal unit, rather than by the spouses individually. For a tenancy by the entirety to be created, six characteristics, or unities, must exist:

1. The spouses must have equal, undivided ownership interests in the estate,
2. The spouses must both have the equal right to possess and control the property,
3. The parties must have been married at the time of their acquisition of the property,
4. The spouses’ interests must have come from the same instrument or transfer, e.g. a will or purchase,
5. The spouses must have acquired their interests at the same time, and
6. The spouses must have rights of survivorship, meaning that upon the death of one spouse, that spouse’s rights in the property automatically vest in the surviving spouse, and the property cannot be devised by either will or intestacy.

Asset Protection and Other Effects

In a tenancy by the entirety, the creditor of one spouse cannot encumber the property without the consent of both spouses. This means that holding property as a tenancy by the entirety has some asset protection advantages. As long as a creditor is the creditor of only one spouse, not both, the creditor cannot seize or place a lien on any property held by tenants by the entirety.

Under this form of ownership, each spouse is equally entitled to any rents or profits from the property. Most significantly in divorce cases, neither spouse can sell, encumber, or otherwise alienate his or her share in the property without the other spouse’s consent.

Conversion to Tenancy in Common

However, upon divorce, the tenancy by the entirety automatically converts into a  tenancy in common, unless the property settlement provides otherwise. Tenancies in common are very similar to tenancies by the entirety, with one key difference: co-owners in a tenancy in common may sell or otherwise alienate their shares without the permission of the co-owners. Thus, upon divorce, the property can be split by the divorce court without obtaining both spouses’ consent.

Property settlements can have an enormous impact on the quality of life-post divorce. So, it is essential to understand the law on this topic as fully as possible. If you are considering divorce or trying to come to an agreement regarding a property settlement, please contact  West Palm Beach family law attorney William Wallshein for a free initial consultation.