Marital Property and Joint Tenancy Law

[Phambiton]

First, let get the disclaimers out of the way. I am NOT seeking legal advice. By posting to this thread, you are not claiming that the information is accurate, updated, or legally enforceable. You are not liable for the content posted here, so post what you think...I think that covers it...

My contract is currently in ROFR. I recently receive a document, Buyer Open Escrow, from the escrow agency Magic Vacation Title requesting for me to check the box as to how I want my DVC titled. The options are, among others, husband and wife and Joint Tenancy with Righs of Survivorship. What I want to know is -- how is Florida's law regarding marital property and joint tenancy ownership? If a couple purchases a property under "husband and wife", are rights of survivorship inferred (as it does in many states) or does the wording "rights of survivorship" has to be explicitly written to claim the benefits thereof?

 

[DVCconvert]

If a couple purchases a property under "husband and wife", are rights of survivorship inferred

yes, and no
My understanding is that as H&W if one of you dies, the other gets the interest. If you get divorced then basically it becomes a tenacy in common, which doesn't automatically pass the interest onto the other (it would be subject to claims by children/heirs etc). As JTWROS both own equally, and in the event of death it passes to the other.

HTH

and no, I don't even play a lawyer on tv

 

[Phambiton]

Oh ok, I like the way Florida does things. . In Texas, JTWROS is inferred to H&W, so if there is a divorce, it's best to sell the property or one ex's ownership in the property to the other. We'll check the "husband and wife" box then...

That was an exceptional answer, bar none...

 

[ORD2KOA]

Whatever you decide, good luck! And congrats!

 

[DVCconvert]

Characteristics of H&W:


If a home or real property is titled in both a husband and wife's names, then the presumption under Florida law is that the property is considered "ownership by the entirety' which means that when either spouse dies, the property becomes the sole asset of the surviving spouse, who can then convey the property through a sale or otherwise, without the need for probate.

At the death of the second spouse (provided no one was subsequently added to the title while the second spouse was living), probate will almost certainly be required to correctly transfer the title to the heirs.


Separate creditors of just one spouse cannot reach tenancy by the entirety property in Florida.

 

[drusba]

Joint tenancy with right of survivorship means that the persons on the deed jointly own the interest in the property and, if one dies, that person's interest automatically goes to the other without going through probate. One member of the joint tenancy can sell his or her interest in the property without the other's consent. Moreover the creditors of one of the joint tenants can force a sale of the interest to pay debt even though the other joint tenant is not responsible for the debt.

If the deed is issued to "Husband and Wife" in Florida that means it is a "tenancy by the entirety." That IS a joint tenancy with right of survivorship except it adds further protections -- one joint tenant cannot sell his interest without the other's consent and creditors cannot force a sale of the property to pay the debts of only one of the joint tenants. This is usually the preferred joint tenancy arrangement if you are husband and wife.

 

[Mindy5767]

May I offer another option that wasn't mentioned. My DVC membership is titled in my revocable living trust. Now... you have to HAVE a revocable living trust to title a real estate interest IN it.... but I do. So I did. By titling the DVC membership in my trust, it will never have to go through probate. Whoever is the beneficiary of my trust at the time of my death will automatically be owner, whether that is my children or husband. There are no worries about any extenuating circumstances. I did have to have my attorney provide a copy of certain pages of the trust document, notarized ... but that only took an extra couple days. Soo....... its mine... all mine.... all mine....

besides.. it was totally my decision to buy... DH just went along for the ride!

Just another option that is out there in case it applies to someone reading.

 

[DVCconvert]

One word of caution with a trust.
Some people mistakenly believe that living trusts provide asset protection. In fact, a living trust provides no asset protection benefits in Florida and most other states.

 

[Mindy5767]

One word of caution with a trust.
Some people mistakenly believe that living trusts provide asset protection. In fact, a living trust provides no asset protection benefits in Florida and most other states.

What do you mean by asset protection? Assets in the trust (revocable living trust---not irrevocable trust) are protected from Probate. They're also protected from inheritance disputes. If you just will something to someone... that can be contested. It is however, not protected from Estate Taxes... as I know well!! If you want to protect your assets from estate tax.... you gotta get them out of your estate. There are various ways to do that... consult an attorney. I recommend protecting your assets from estate taxes by spending your money on DVC and your Disney vacations if you anticipate being subject to estate tax. Once you've spent your money, the government can't get it. They cannot take away all the years of enjoyment you had with your family. Consult me for details.

 

[DVCconvert]

What do you mean by asset protection?

Assets held within a living trust in Florida are within reach by creditors and are at risk in the event of bankruptcy. This vechicle works as you've decribed inre estate taxation, but will not afford asset protection in the above perils.

 

[Mindy5767]

Assets held within a living trust in Florida are within reach by creditors and are at risk in the event of bankruptcy. This vechicle works as you've decribed inre estate taxation, but will not afford asset protection in the above perils.

Oh right.... I wasn't even thinking of that sort of protection. You'd really probably have to have them in a irrevocable trust to protect them from bankruptcy... but I'm not familiar with bankruptcy law.. I just know that assets in a irrevocable trust are in most instances... not considered under your control anymore. So that puts them out of reach of even estate taxes. I am the trustee of one, but I'm not completely familiar with the situations you describe with creditors because they have not applied.

A revocable living trust is an ideal vehicle to use for titling any sort of real estate (DVC included) for purposes of keeping it out of the tangle of probate for smooth transition. Probate can take more than a year with many estates and thus disposing of the real estate which is going through probate is not as neat and tidy.

 

[DVCconvert]

.... I wasn't even thinking of that sort of protection. You'd really probably have to have them in a irrevocable trust to protect them from bankruptcy...

No, if you read my prior post, you'll see that that is accomplished by the use of the 'ownership by the entirety' .

 

[JimMIA]

Whoever is the beneficiary of my trust at the time of my death will automatically be owner, whether that is my children or husband.

That's a bit of an oversimplification, and could be misleading. There are three terms you need to understand with respect to trusts -- Grantor, Trustee, and Beneficiary.

The person who creates the trust is the Grantor, and in a revocable trust the Grantor can change the terms of the trust at any time, including changing the beneficiaries and trustees. When the Grantor passes away, the trust becomes irrevocable and cannot be changed.

The Trustees are the legal owners of all trust property -- similar to the Board of Directors of a corporation. The Trustees make all decisions about acquisition and sale of trust assets, manage the trust operations, and would manage any dissolution of the trust.

Beneficiaries (if any) are people (or legal entities) specified in the trust documents as having a claim to some sort of benefit from the trust. That could be income, a charitable donation, proceeds of the liquidation of the trust, or whatever.

Another very important benefit of a trust is the continuity of management following the demise of the Grantor. That can be extremely important if the assets owned by the trust are financial assets.

We faced that issue with our family trust when my Dad passed away. There were a lot of assets in the trust, but everything continued on smoothly because the management of those assets was unaffected by his passing.

 

[Mindy5767]

Exactly..... you said it quite well.... and in nice detail.