In Florida, tenancy by entireties (TBE) property of two spouses provides various benefits. These include protection of the assets against creditors of only one spouse, avoidance of probate, and protection of one spouse from unauthorized disposition of TBE property by the other.
Regarding this last point, it is well settled in Florida that an estate by the entireties is vested in the husband and wife as one person, and neither spouse can sell, forfeit, or encumber any part of the estate without the consent of the other, nor can one spouse alone lease it or contract for its disposition without such consent.
What happens if this is violated? If this rule is violated, can the injured spouse recover the assets from a third party recipient, or is the remedy of the injured spouse only a judgment against the wrongful spouse and collection from the assets of that spouse? Where the wrongful spouse has insufficient assets to make the injured spouse whole, the ability to collect against the transferred assets could be critical to the injured spouse.
A recent Florida case summarizes and applies the law in Florida on this issue. In the case, the husband diverted millions of dollars of TBE property to the husband’s girlfriend. While a matter of dispute, the trial court believed this was done without the wife’s consent.
The court allowed a constructive trust to be applied to the assets in the hands of the girlfriend. Interestingly, and importantly, the court noted that such a constructive trust can be imposed even if the recipient did not engage in any wrongful conduct. Thus, the case confirms that an injured spouse can go against the recipient of property to collect back any property transferred without the injured spouse’s consent.
Wallace v. Torres-Rodriguez, 3rd DCA 5/11/22