5.4 Creating or Adding to Entity Property

Once a claim arises, of course, the creation of a tenancy by the entirety could be a fraudulent conveyance if the Fraudulent Conveyance Act is tripped.   Under Com. Law § 15-204, “[e]very conveyance made and every obligation incurred by a person who is or will be rendered insolvent by it is fraudulent as to creditors without regard to his actual intent, if the conveyance is made or the obligation is incurred without fair consideration.”   Thus, in Cruickshank-Wallace, the defending spouse claimed that the transfer of the refund check to her was, if not already held tenants by the entirety, for “fair consideration.”   The fair consideration asserted was satisfaction of the husband’s duty of family support.   The court rejected this argument, repudiating part of its earlier (by 20 years) opinion in Pearce v. Micka, 62 Md. App. 265, 489 A.2d 48 (1985).   In Pearce, the court permitted transfers to the extent of interest payments on the mortgage on the family home under the support doctrine but held that payments of mortgage principal were fraudulent.   The Cruickshank-Wallace court looked to the statutory exemptions permitted a debtor (tools of trade; personal allowance, etc.) and limitations on garnishment as legislative expressions of adequate protection for family dependents.   The court also pointed to the duty of the wife equally to provide family support.   In the post-ERA world, family support no longer constitutes an automatic exception under the fair consideration provisions.