A rose by any other name is still a rose. . .
A joint account by any other name is NOT the same. . .
How you can title your checking account jointly – important because in State of Florida, there are tenants by the entirety- not all the states permit this type of ownership, and it provides asset protection to those assets – if it’s tenants by the entirety, it’s protected as marital assets in its entirety, but if you choose JRWOS, then half of the assets are up for grabs
What is the difference between Joint With Rights of Survivorship (JWROS), Tenants by the Entirety (TBE), and Tenants In Common (TIC)?
Joint With Rights of Survivorship (JWROS)
Two or more individuals (or entities) can own an asset together with rights of survivorship. The rights of survivorship mean that upon the death of one owner, the remaining owner(s) receive the decedent’s share without the need to initiate a probate proceeding. Creditors may attach a debtor’s share of ownership of the property.
- A, B, and C own Blackacre as JWROS. B dies, A and C own Blackacre JWROS. No probate proceeding required. A death certificate typically needs to be filed with some agency, recorded with the county property appraiser’s office, or presented to the financial institution depending on the underlying asset. This happens by operation of law based on the title JWROS.
- A, B, and C own Blackacre as JWROS. Creditors have an enforceable claim against A. A’s creditors can enforce their claim against A’s share of Blackacre.
Tenants by the Entirety (TBE)
ONLY spouses can own property as Tenants by the Entirety (TBE). Not all states permit this type of ownership title. Florida does. This is also a right of survivorship title. Like the JWROS title, upon the death of the first spouse to die, the property transfers to the surviving spouse. The distinction between JWROS: A creditor of either spouse, individually, is NOT permitted to attach any portion of the asset because the property is considered a protected marital asset. However, if a creditor has a claim against both spouses, then the marital asset protection is lost.
- H and W own Blackacre as TBE. H dies, W owns Blackacre Individually. No probate proceeding is required. This happens by operation of law based on the title TBE.
- H and W own Blackacre as TBE. Creditors have an enforceable claim against H. Creditors can NOT enforce their claim against any portion of Blackacre because it is a marital asset.
Tenants In Common (TIC)
Two or more individuals (or entities) can own an asset together as Tenants In Common. Typically, the ownership is in equal shares, however, a percentage share ownership can be included in the title to reflect the contribution made by each party. If the asset is sold, the owners receive the proceeds from the sale in the same portion as the ownership. This is NOT a right of survivorship title. At death, an owner’s share can be distributed to a beneficiary by direction of a Last Will & Testament, which requires a probate proceeding, or a Trust Agreement if the decedent’s share was titled in the name of his/her Trust. A creditor’s claim is limited to the share of ownership of the debtor.
- D and E own Blackacre as TIC, 50/50. D dies, D’s 50% is distributed to whomever D provides for in D’s estate plan. Of course, if there is no estate plan, then it will be distributed in accordance with the Florida Intestacy Statutes. A probate proceeding will be required unless D had titled his share in the name of a Revocable Trust.
- D and E own Blackacre as TIC, 50/50. Creditors have an enforceable claim against D. Creditors can enforce their claim against D’s 50% share of Blackacre.