About 71 years ago, today, Japanese warplanes attacked the U.S. naval base at Pearl Harbor, Hawaii. It was a devastating time for our nation and as President Roosevelt said, it was “a date that will live in infamy.” We will forever be indebted to the millions of U.S. troops and veterans that fought for our country.
The country we live in is our home. The house we live in is also our home, on a more personal level. In fact, it is our fortress that we all would like to protect from surprise enemy attack. For many South Floridians, the home is the largest asset. Estate planning revolves around the concept of asset protection. Your South Florida estate planning attorney can help you ward off any possible creditor strike on your estate. The key lies in “how” you own your home.
In Florida, joint tenants by the entirety (TBE), is a special type of joint tenancy recognized between married couples. The great benefit is that if one spouse is encumbered with an individual debt or judgment against him or her, the property cannot be partitioned or subject to forced sale without the permission of both spouses. The justification in this approach is that it would be unfair for a non-debtor spouse to lose his or her primary residence in order to satisfy a debt which is not the product of his or her own doing. In addition, neither husband nor wife may convey his or her interest in the real property without the consent of the other. Finally, when one spouse dies, the surviving spouse will take title to the entire property while avoiding probate.
Another way to jointly own title is through joint tenants with right of survivorship (JTWROS). Like TBE, this approach to holding real estate avoids probate. However, unlike TBE, creditors may be able to force partition and sale of the debtor’s interest. This approach to holding title would not adequately protect the home asset of the other spouse or unmarried titleholder. A creditor may be able to seize the interest of the debtor resulting in a huge misfortune to the non-debtor.
In South Florida, TBE is a very effective asset protection plan for a married couple. In Florida, unlike most other states, all types of property, including real property, tangible and intangible personal property may be titled as TBE. However, there are still drawbacks that must be considered, therefore; it would be wise to seek legal counsel. In the long run, this security against creditors may be lost following dissolution of marriage or death of a spouse. There are other issues to consider such as how TBE affects estate tax. Your South Florida attorney can assist you through the implementation of estate planning techniques that can achieve optimal estate tax planning.
For more information on successful Florida estate planning, please contact the South Florida law firm of Wild Felice & Partners, P.A. at (954) 944-2855 to schedule your free consultation. While our South Florida estate planning attorneys have the expertise in tax planning, as well as the designations of LL.M. and CPA that provide for the highest level of professional service, our firm aims to shed the tax attorney paradigm that estate planners are often pigeon-holed with and focus instead on the dynamic relationships between our clients and their loved ones.
Estate planning is about those friends and family left behind, which is why we first ask our clients what their wealth transfer and asset protection goals are and then explain how we can accomplish those goals together.
It’s a Wild world. Are you protected?SM