How Can Married Couples Protect their Assets from Creditors?

Protecting your assets from creditors and lawsuits should be part of your estate plan.

There are a number of asset protection strategies that you can integrate into your estate plan. Which ones are right for you will depend on your individual situation and state laws, so be sure to consult with an experienced estate and probate lawyer.

No single asset protection strategy may be the “be all and end all” for you, but each one does have its advantages.

In today’s post we are going to discuss just one asset protection strategy available to married couples —that of owning assets as Tenants by the Entireties (commonly referred to as “TBE”).

(Please note that owning assets as TBE is available only to married couples.)

Asset Protection in a Nutshell

Let’s start by looking at some of the reasons why asset protection is important. It may be uncomfortable to think about, but there are any number of situations that could arise in which you could lose your hard-earned wealth or property. Consider these few:

  • Divorce
  • Car accidents
  • Someone is injured on your property, and you get sued.
  • Business failures
  • Litigation of any nature

Asset protection is a way of preventing creditors from reaching your money/property. Using proper asset protection strategies before any creditor issue arises can be an effective protection strategy.

Asset protection is a legal means of safeguarding your assets and making it more difficult for creditors to collect on those assets. It doesn’t make it impossible for creditors to collect on their debts, it simply makes it more difficult for them to reach particular assets (like your home or financial accounts) in order to do so.

There are many different strategies you can use, and, as mentioned above, today’s post will only be discussing one of those strategies, so be sure to consult with your Florida estate and probate attorney to discuss your particular needs.

Owning Your Assets as Tenants by the Entireties

A simple way that married couples can protect their assets is to make sure to hold title to as much of their property as they can as Tenants by the Entireties (“TBE”).

Married couples can own any type of property as TBE, including real estate and bank or investment accounts.

So, how does this help protect against creditors?

Well, when you own property as TBEs:

  • during the marriage, neither spouse can convey the asset/assets without the consent of the other
  • a creditor of just one spouse cannot attach or lien the property, and
  • when one spouse dies, the asset is automatically titled in the name of the surviving spouse, avoiding probate.

Importantly, only joint creditors can reach property that is held as TBE.

While real estate in Florida is automatically owned as TBE as long as the deed to the property refers to the owners as “a married couple,” or as “husband and wife,” etc., the same is not true with financial accounts.

Most financial accounts are titled as “joint tenants,” or “joint tenants with right of survivorship” or it may simply say “John Doe OR Jane Doe.” None of these ownership forms are TBE ownership—so they will not afford asset protection.

To provide your financial accounts with asset protection, talk to your bank and confirm how the account is titled. Then, if necessary, re-title the account as Tenants by the Entireties.

If your bank won’t title it as TBE (because some won’t), take your money elsewhere.

Protecting Your Family is Just a Phone Call Away.

Don’t leave planning for your future and that of your loved ones to chance. All it takes is one phone call to SJF Law Group to ensure that your wishes will be followed, and your loved ones taken care of when you are gone. We expertly guide individuals through the complex probate process, and capably handle all aspects of the creation, administration, and settlement of trusts as well.  When you work with the estate planning attorneys at SJF Law Group, you get more than just an estate plan: you get peace of mind. Call us at 954-580-3690 or email us at: [email protected] today.

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