I’m Eric Lanigan with Lanigan and Lanigan
in Winter Park and I’d like to talk for a moment about an episode that recently happened
in a bankruptcy that involves the tenancy by the entirety exemption in the state of
Florida. Tenancy by the entirety property is property that a husband and wife own jointly.
And I often say in a marriage that there are two people but there are actually three property
owners: Property that the husband owns, there’s property that the wife owns and then there’s
this third property owner and that’s the husband and wife jointly, and that’s the tenancy by
the entirety. And in Florida, there’s a presumption that property accumulated in the marriage
is tenancy by the entirety’s property, unless the husband and wife have done some affirmative
act that would inicate otherwise. And the most common affirmative act for instance is
if you go out and buy a car and you put the title in just person’s name. Well that would
be considered an affirmative act showing that only one person was intended to be the owner
of the car. I had a situation come up recently where the
husband was filing bankruptcy as the result of some business failures, but the wife was
not filing. The only issue that we really had in the case came down to the husband had
a very expensive watch and even on a pawn type shop value came down to about $5,000.
And he only has $1,000 of personal property exemption as well. So basically the $5,000
watch would be a non-exempt asset. So in order for him to be able to keep the watch he would
have to pay the trustee $5,000. And after some thought I decided we’re going
to list the watch as a joint asset. And we’re going to treat it as a tenancy by the entirety
exemption. And the reason I came to that concluson is that I asked the question, “well how did
you come by this watch? Was it a gift to you?” And he said, “no, it was a gift to myself.” He just went and then ended up in the jewelry
store and probably on an impulse buy ended up with this watch. Well he paid for it out
of their joint bank account. Joint assets were used to by the watch. So I took the position
that one spouse cannot unilaterally divest the other spouse of their value in an asset
just by going out and buying something that they decided to make their own. Just like
if the wife went out and went to the jewelry store and on an impulse bought herself some
diamond earrings or a diamond necklace and used their joint account why would that suddenly
become just her asset? If their joint assets purchased it, why wouldn’t that likewise be
a joint asset? Now if you give your spouse diamond earrings
for their birthday or you give your husband a Rolex watch for your anniversary, that’s
clearly showing an intent that the property belongs to one or the other. So sure enough we get to the meeting with
the trustee and in one of the categories where you list the jewelry and the like, and we
listed his watch and we listed the brand and we listed the value at $5,000 and I listed
it as joint property and took tenancy by the entirety exemption. Of course the trustee
practically hopped out of her seat and took the position, that how could his watch be
joint property? I said well, first of all you’re calling it
his watch, I’m calling it their watch and I used the example I just gave you. I said
just because he pulled money out of their account and bought a watch that she doesn’t
wear, doesn’t mean that she doesn’t have ownership in it. They also have a large, riding lawnmower
that probably cost several thousand dollars and I listed that as joint property. And I
said, “she’s probably never even sat on the lawnmower, much less driven around and mowed
the lawn, but nobody contests the fact that that’s jointly owned property.
So how can he just unilaterally just take their joint money and something that just
decide that that instantly becomes his. I said we’re not going to change the exemption
and if you want to fight about it we’ll fight. We never got an abjudication by the court
because they let it go. Which tells me that they really were just in a bad situation if
they couldn’t show that there was some donative intent by one spouse or the other in giving
these assets to one or the other. Don’t automatically assume that because you’re the only that uses
the item, whether you’re the only one that uses the item, whether you’re the only one
who wears the diamond earrings or that you’re the only one that wears the gold rolex watch
that that automatically makes it yours. We might use that phraseology in our every day
conversations to identify my watch vs. my wife’s watch. But that doesn’t necessarily
mean that legally anything has occurred that would allow your or disallow you from treating
it as a joint asset in bankruptcy. So keep that in mind as you’re fill those things out
whose the legal owner it may well be different than who you refer to as owning the property. Again, Eric Lanigan, an attorney with Lanigan
and Lanigan in Winter Park, Florida, thank you.