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Bank Accounts Owned by Husband and Wife are Not Always Protected as Accounts Held as Tenants by the Entireties

Married couples may own property in various ways, including as tenants by the entireties. However, only property held by a married couple as a tenancy by the entireties is exempt from garnishment by the individual creditors of either spouse.

In Beal Bank, SSB v. Almand & Associates, 780 So. 2d 45 (Fla. 2001), the Florida supreme court explained that “if the signature card of the account does not expressly disclaim the tenancy by the entireties form of ownership,” then a joint spousal bank account would be presumed a tenancy by the entireties so long as the account was established in accordance with the six “unities” required at common law for this form of joint property ownership. Id. at 58.

Beal Bank held that “an express designation on [a] signature card that the account is held as a tenancy by the entireties ends the inquiry as to the form of ownership.” Id. at 60. Beal Bank also held that “if a signature card does not expressly disclaim a tenancy by the entireties form of ownership,” then “a rebuttable presumption arises that a tenancy by the entireties exists provided that all the other unities necessary for a tenancy by the entireties are established.” Id. “However, if a signature card expressly states that the account is not held as a tenancy by the entireties and another form of legal ownership is expressly designated, no presumption of a tenancy by the entireties arises.” Id. at 60-61. Beal Bank explained that such an “express disclaimer would end the inquiry as to whether a tenancy by the entireties was intended.” Id. at 61.

The supreme court in Beal Bank determined that the accounts at issue were entitled to the benefit of the presumption that they were held by the depositors as entireties property. Id. at 62. In reaching this conclusion, the supreme court rejected the argument, with respect to one of the accounts at issue, that the financial institution at which it was held “attempted through its rules and regulations” contained in a “Welcome Brochure” to preclude its depositors “from establishing a tenancy by the entireties.” Id. at 61. The supreme court determined that the “Welcome Brochure” governed only the relationship between the depositors and the financial institution. It concluded that, “because the signature card did not contain an express disclaimer that the account was not held as a tenancy by the entireties,” the brochure’s attempt to preclude such an ownership designation on all accounts was not “sufficient to eliminate the presumption in favor of tenancy by the entireties as between the depositor and a third party creditor.” Id.

While the supreme court made clear in Beal Bank that it “hope[d] to bring greater predictability and uniformity to the common law” by its holding, it also “urge[d] the Legislature” to amend section 655.79(1) to codify in Florida’s statutory law the common law presumption recognized in the case in favor of joint spousal accounts being entireties property. Id. at 62 n.24.

In 2008, several years after Beal Bank, the Legislature added language to section 655.79(1) codifying in Florida’s statutory law the presumption in favor of joint spousal bank accounts being tenancy by the entireties property. However, the Legislature did more in its 2008 amendment than simply codify the holding in Beal Bank. The Legislature went a step further and codified that “all spousal bank accounts are considered as held by tenan[ts] by the entireties unless otherwise specified in writing.”

This then left open the question as to what type of “writing” is required by section 655.79(1) to negate the presumptive tenancy by the entireties ownership designation created by the statute for joint spousal bank accounts. This question was answered by the Fourth District Court of Appeal in Storey Mountain, LLC v. George, 257 So.3d 709 (Fla. 4th DCA 2023).

In Storey Mountain, the issue before the court was whether an account jointly held by spouses was subject to garnishment by a creditor of only one spouse. The signature card at the bank included language indicating that, by signing the document, they agreed to be bound by the terms of the bank’s standard checking account agreement (the agreement). Page 9 of the agreement provided:

FOR ACCOUNTS IN FLORIDA: If an Account is in the names of spouses, you understand, intend and agree that such an Account is NOT owned as tenants by the entireties unless otherwise expressly designated on the Account records. We reserve the right to refuse to allow you to hold the Account as tenants by the entireties, in our discretion.

Notably, this language appeared in a section of the agreement entitled “Joint Accounts,” which also expressly advised all joint account owners that their accounts would be held “as joint tenants with the right of survivorship and not as tenants in common.”

The trial court granted the wife’s motion to dissolve a writ of garnishment served on the account owned jointly by spouses. The Fourth District Court of Appeal reversed.

The Storey Mountain court determined that the Legislature’s use of the word “writing” in the 2008 amendment to section 655.79(1), is broader than the narrower phrase “signature card” already present in the statute. It then held that Beal Bank’s holding—that all disclaimers of entireties ownership of joint spousal bank accounts be expressly made on signature cards—was not adopted by the Legislature when it otherwise codified the entireties presumption for such accounts through the amendment. Moreover, the court held that the amendment to the statute also defined the term “writing,” to include “handwriting, printing, typewriting, and all other methods and means of forming letters and characters upon paper, stone, wood, or other materials,” is broad enough to encompass the agreement incorporated by reference into the terms of the signature card in this case.

The Storey Mountain court held that the 2008 amendment to section 655.79(1) meant that an entireties ownership disclaimer for a joint spousal bank account may appear in any “writing,” including any written integrated document incorporated by reference into a signature card.

The court held that the unambiguous language on page 9 of the incorporated agreement in Storey Mountain specifically disclaimed entireties ownership of the disputed joint spousal account in favor of the account being a joint tenancy with right of survivorship, thereby making it subject to garnishment to satisfy the judgment entered against only the husband, but also his wife jointly.

What is the takeaway? Individuals seeking to protect their assets from creditors by owning them by their entireties should use caution when establishing accounts. Although most institutions recognize tenancy by the entireties’ ownership, some do not recognize tenancy by the entireties. Careful attention should be given to a review of the account agreement before establishing an account.

Additionally, creditors seeking to enforce judgments against a single spouse should review the account agreement for every institution where the debtor spouse has an account to determine if the assets are subject to garnishment, notwithstanding the ownership with the non-debtor spouse.

Rosenthal Law Group is here to assist you with evaluating the accounts for asset protection and your litigation needs.