How to Protect ALL of your Assets from Creditors With Tenancy by the Entirety?
Tenancy by the entirety is a tool you can use to outwit debt collectors. It allows a husband and wife to own property together as a single legal entity. Why should you care about this legal tool? Because judgment creditors for either party cannot put a lien against your property. That means if you own a debt (and not your spouse), the creditor cannot touch a penny of any interest you have in a tenancy by the entirety item.
According to Attorney Jonathan B. Alper, any property (“including all real property, tangible personal property, and intangible personal property”) can be protected by this law.
If you live in one of the following states, you can claim tenancy by the entirety for property like your home, your car, and your checking account, fully protecting it from creditors:
- Alaska
- Arkansas
- Delaware
- District of Columbia
- Florida
- Hawaii
- Maryland
- Massachusetts
- Mississippi
- Missouri
- New Jersey
- Mississippi
- Oklahoma
- Pennsylvania
- Rhode Island
- Tennessee
- Vermont
- Virginia
- Tennessee
- Wyoming
States that allow tenancy by entirety for real estate only:
- Illinois
- Indiana
- Kentucky
- Michigan
- New York
- North Carolina
- Oregon
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There are a few rules you need to follow to get this powerful protection. You must:
- acquire the property at the same time
- acquire the property through one title
- have equal interest in the property
- have equal rights of possession
- be husband and wife
- if real estate, you must occupy as your primary residence
If the spouse who owns the debt dies first, the judgment creditor can’t ever put a lien on your property. It isn’t true the other way around though, so if the debtor spouse is the surviving spouse, you’ll need to use other methods to outwit your creditors. Tenancy by the entirety is a complicated are of the law: if you are going to use it, get a decent lawyer to draft your deed. There are many situations where tenancy by the entirety will not work, or may not be the best option for you.
Reference
Alper Law: Asset Protection
Thomas Moens Law Offices, Tenancy by the Entirety
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