1.1 The asset protection afforded married couples in Maryland with tenancy by the entirety is strong.[1] Generally, a creditor of one spouse cannot attach tenancy by the entirety property unless the debt is an obligation of both.[2]
1.1.1 A dramatic illustration of this concept is offered in Watterson v. Edgerly, 40 Md. App. 230, 388 A.2d 934 (Md. App.1978). In Watterson, the husband was subject to a judgment debt. Thereafter, he transferred all of his interest in the tenancy by the entirety real estate to his wife. She thereupon created a will leaving her assets in trust for the benefit of her husband with a spendthrift clause. The wife died 61 days after the transfer of real estate to her. The Court of Special Appeals said that the husband’s creditor “has no standing to complain” because it never had an attachable interest in the property.[3]
1.1.2 Maryland recognizes tenancy by the entirety ownership in real and personal property. Diamond v. Diamond, 298 Md. 24, 467 A.2d 510 (Md. 1983) (“It is well established that this Court recognizes that a tenancy by the entirety may be created in personal property”).
1.1.3 The fact that an account is joint but subject to the order of either should not alter the presumption it is held tenancy by the entirety. Thus, in In re Breslin, 283 B.R. 834 (Bankr. D. Md. 2002), the federal court referred to Brewer v. Bowersox, 92 Md. 567, 48 A. 1060 (Md. 1901) for the proposition that when an account is held disjunctively but payable only to the two spouses subject to the order of either, entireties is created.[4] Obviously, if one’s intention is to create a tenancy by the entirety account, especially if it will be subject to the order of either, the account contract should designate it as an entireties account. The theory for the proposition that a disjunctive account may still be an entireties account is that each spouse is deemed an agent authorized to act for the other. See e.g., Beal Bank, SSB v. Almond & Assoc., 780 So. 2d 45, 62 (Fla. 2001)(“[T]he ability of one spouse to make an individual withdrawal from the account does not defeat the unity of possession so long as the account agreement contains a statement giving each spouse permission to act for the other.”)
[1] See generally: Franke, “Asset Protection and Tenants by the Entirety,” 34 ACTEC J. 210 (2009), attached to this paper. Because the article is attached, the treatment here will be abbreviated. This paper will focus on Maryland law. The various states that recognize tenancy by the entirety ownership treat that form of ownership differently.
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