Generally, except in Craft situations, the full bar jurisdictions permit a debtor spouse to convey the entirety property to the non-debtor spouse or for both spouses to transfer the property to third persons without running afoul of the fraudulent conveyance statute.[1] The planning implication is obvious: Married individuals with exposure to liability should hold as much of their property as possible by the entireties.[2] Once liability against one spouse is triggered, the at-risk spouse may transfer the property to the non-debtor spouse.[3] In Watterson v. Edgerly,[4] for example, a husband had a judgment lien filed against him but not against his wife. The husband transferred his interest in their entirety property to his wife for no consideration.[5] The wife thereupon signed a will containing a testamentary spendthrift trust for the benefit of her husband, and died shortly thereafter.[6] The Maryland Court of Special Appeals upheld the conveyance of the real estate despite the judgment lien against the husband:
When, as here, a husband and wife hold title as tenants by the entireties, the judgment creditor of the husband or of the wife has no lien against the property held as entireties, and no standing to complain of a conveyance which prevents the property from falling into his grasp.[7]
This technique is not restricted to intra-spousal transfers. In Sawada v. Endo,[8] a judgment was rendered against a husband for an automobile tort. He and his wife conveyed their entireties property to their children. The Supreme Court of Hawaii found that the conveyance could not be a fraudulent one because the creditors had no attachable interest.[9]
Thus, as illustrated above, as long as bankruptcy can be postponed or avoided, transferring an entireties tenancy with only a single debtor-spouse can move the property free of the debt. This is clearly an important benefit of the entireties form of ownership. From an asset protection point of view, entireties ownership is a valuable tool that ought to be preserved.
Using the flexibility afforded by the Internal Revenue Code section 2518, an estate plan can be crafted anticipating that a qualified disclaimer will be used by a surviving spouse to fund a credit shelter or qualified terminable interest property (“QTIP”) trust.[10] Under the Internal Revenue Service’s 1997 regulations, disclaimer of the “survivorship interest” in entirety property is permitted within nine months of death (not the creation of the interest).[11] This provides an opportunity to preserve the asset protection qualities of entireties without unduly compromising estate planning.[12]
A creditor problem may exist at the first spouse’s death. If the debtor spouse predeceases the non-debtor spouse, no action is necessary to have the property pass to the survivor lien free if the property is held as entireties. If the debtor spouse survives, however, a disclaimer may be useful to avoid the lien on that spouse’s portion of the entirety property.
Other than for federal tax liens, a disclaimer is typically not a transfer for fraudulent conveyance purposes in most jurisdictions.[13] As explained by one state’s highest court:
A review of the jurisprudence of other states shows that it is the majority view that a renunciation under the applicable state probate code is not treated as a fraudulent transfer of assets under the UFTA [Uniform Fraudulent Transfers Act], and creditors of the person making a renunciation cannot claim any rights to the renounced property in the absence of an express statutory provision to the contrary.[14]
In Pauw v. Agee,[15] a federal district court permitted a debtor to disclaim his inheritance but then rent the property back from his brother who received the property through operation of the disclaimer: “This view [that a disclaimer will defeat the judgment against the debtor-disclaimant] corresponds with the majority view that a creditor cannot prevent a debtor from disclaiming an inheritance.”[16] New York also follows the majority rule. In Estate of Oot,[17] the court upheld the renunciation of a legacy regardless of the disclaimant’s creditors’ claims: “It is with no small degree of reluctance that the court arrives at this decision. However, until the legislature in its wisdom provides some statutory vehicle for protecting creditors against frustration of their claims, unfortunate results may again occur.”[18]
A minority of states hold that a disclaimer is a fraudulent transfer. Pennsylvania courts, for example, have held a disclaimer to be a fraudulent transfer. “While a solvent legatee may freely renounce and refuse a gift or legacy, an insolvent legatee may not do so since his renunciation would constitute a fraudulent conveyance, void as to creditors under section 4 of the Uniform Fraudulent Conveyance Act of May 21, 1921.”[19] Several states have statutes that prohibit disclaimers by insolvent heirs. Disclaimers are prohibited in Florida, for example, when “the disclaimant is insolvent when the disclaimer becomes irrevocable.”[20]
The 2002 rendition of the Uniform Disclaimer of Property Interests Act (“UDPIA”) bars disclaimers if, before the disclaimer becomes effective, the disclaimant “voluntarily assigns, conveys, encumbers, pledges or transfers the interest sought to be disclaimed.”[21] Earlier versions of the uniform acts had similar language barring disclaimers after an encumbrance but without the “voluntary” element. Interpreting a disclaimer act without the “voluntarily” aspect, one state court barred a disclaimer when the disclaimant was subject to a prior lien. After deciding that the act’s encumbrance provision trumped its “relation back”[22] provision, the Alabama Supreme Court held that a creditor’s lien against the disclaimant rendered the disclaimer ineffective.[23] The court focused on the heir’s direct interest in estate property:
When John Thomas Bigham died intestate on June 25, 1984, the legal title to a one-half interest in his real property vested eo instante in Bobby Bigham; however, it vested subject to the statutory power of the administratrix to take possession of it and obtain an order to have it sold for payment of the debts of his father’s estate.[24]
In Pennington, a judgment creditor had perfected her lien against all of the disclaimant’s property before the disclaimant’s father died; therefore, the lien acted as an encumbrance of the disclaimant’s share. Under the circumstances of that case, a disclaimer after the attachment of the lien constituted a fraudulent conveyance.[25]
Similarly, In re Kalt’s Estate,[26] the California Supreme Court found a disclaimer to violate the fraudulent conveyance act. Kalt’s Estate is important because it served as the basis of many other decisions constituting the minority view. California, however, subsequently legislatively reversedKalt’s Estate:
The few states which appear to follow the minority view that a disclaimer can constitute a fraudulent conveyance base their holdings on the California case of In re Kalt’s Estate. . .The holding of In re Kalt’s Estate, however, was overruled by the California legislature when it enacted a statute providing specifically that a disclaimer is not a fraudulent transfer. See Cal. Prob. Code § 283 (West 1991).[27]
In sum, given the variations among the states, no universal default planning rule can be applied. Nevertheless, in full bar states that do not treat a disclaimer as a fraudulent conveyance, preserving, or indeed creating, entireties ownership coupled with estate planning to be triggered by a disclaimer at the first death, should become a default recommendation.
[2] Individuals who typically have liability exposure include physicians, lawyers, public accountants, and business executives with Sarbanes-Oxley exposure.
[3] See above, however, for the danger of making such a conveyance before the filing of a voluntary or involuntary petition in bankruptcy.
[4] 388 A.2d 934 (Md. 1978).
[5] Id. at 937.
[6] Id.
[7] Id. at 939 (citation omitted); see also Donvito v. Criswell, 439 N.E.2d 467, 473-74 (Ohio 1982); L&M Gas Co. v. Leggett, 161 S.E.2d 23, 27-28 (N.C. 1968).
[8] 561 P.2d 1291 (Haw. 1977). This case is quoted at length above in section II on state variations.
[9] Id. at 1295-97.
[10] I.R.C. § 2518(b)(4).
[11] I.R.S. Treas. Reg. § 25.2518-2(c)(4)(i) (West 2008). A special rule, however, applies to joint bank accounts between spouses “if a transferor may unilaterally regain the transferor’s own contributions without the consent of the other cotenant…”. Id. at (c)(4)(iii). For such joint tenancies, the surviving joint tenant may not disclaim any portion of the account attributable to consideration furnished by that surviving joint tenant. As noted in Section II on state variations, above, a joint account subject to the order of either spouse may nevertheless be an entireties account. Presumably such an account would fail the definition of “joint account” contained in these regulations.
[12] To backstop the plan, each spouse should create a durable power of attorney authorizing another person to disclaim on his or her behalf in the case that he or she is incompetent at the time of their spouse’s death. Also, of course, the trust receiving the disclaimed property cannot permit a power of appointment to the disclaiming spouse. The retention of entireties property until the death of one spouse necessarily involves a high degree of trust between spouses; each spouse must be certain that the survivor will trigger the creditor shelter or QTIP trust if appropriate. Increasingly estate plans are being designed to give the surviving spouse such control over his or her destiny. See Jeffrey N. Pennell, Estate Planning for the Next Generation(s) of Clients: It’s Not Your Father’s Buick, Anymore, 34 ACTEC J., Summer 2008, at 2; see alsoHenry M. Ordower, Trusting Our Partners: An Essay on Resetting the Estate Planning Defaults for an Adult World, 31 Real Prop. Prob. & Tr. J. 313 (1996).
[13] Neither the 2002 Uniform Disclaimer Property Interest Act (“UDPIA”) nor the earlier uniform acts directly address the issue of a disclaimer by an insolvent disclaimant. All of the uniform acts relied on the law of each jurisdiction to sort out the issue. See Adam J. Hirsch, Revisions In Need of Revising: The Uniform Disclaimer of Property Interests Act, 29 Fla. St. U.L. Rev. 109 (2001). Separate considerations are also involved in Medicaid planning. See Unif. Disclaimer of Prop. Interests Act § 13 cmt (amended 2006). Nothing in the general discussion herein on disclaimers is meant to address Medicaid planning issues.
[14] Essen v. Gilmore, 607 N.W.2d 829, 835 (Neb. 2000). For a summary of the treatment of disclaimers in other states,see also In re Bright, 241 B.R. 664, 671-72 (B.A.P. 9th Cir. 1999) (upholding a pre-petition disclaimer). In contrast, post-petition disclaimers will not work. In re Schmidt, 362 B.R. 318 (Bankr. W.D. Tex. 2007).
[15] No. 2:98-2318-23, 2000 U.S. Dist. LEXIS 22323 (D.S.C. 2000).
[16] Id. at *19.
[17] 408 N.Y.S.2d 303 (1978).
[18] Id. at 306.
[19] Est. of Centrella, 20 Pa. D.&C.2d 486, 490 (1960) (citations omitted).
[20] Fla. Stat. Ann. 739.402(2)(d) (West 2008); see also Minn. Stat. Ann. § 525.532(6) (West 2008).
[21] Unif. Disclaimer of Prop. Interests Act § 13(b)(2).
[22] The “relation back” doctrine of earlier versions of the UDPIA has been replaced in the new Act. “The disclaimer takes effect as of the time the instrument creating the interest becomes irrevocable, or, if the interest arose under the law of intestate succession, as of the time of the intestate’s death.” Unif. Disclaimer of Prop. Interests Act § 6(b)(1). The Comment to that section states: “This Act continues the effect of the relation back doctrine, not by using the specific words, but by directly stating what the relation back doctrine has been interpreted to mean.” The term “relation back” is used in the Article as short-hand for the revised section.
[23] Pennington v. Bigham, 512 So.2d 1344 (Ala. 1987).
[24] Id. at 1345-46.
[25] Id. at 1347. The 2002 amendments to the UDPIA, of course, adds “voluntary” to the list of actions barring a disclaimer. This addition “reflects the numerous cases holding that only actions by the disclaimant taken after the right to disclaim has arisen will act as a bar.” Unif. Disclaimer of Prop. Interests Act § 13 cmt. Maryland, for example, adopted this provision of the UDPIA and added that “Creditors of the disclaimant have no interest in the property disclaimed.” Md. Code Ann., Est. & Trusts § 9-202(f)(2) (West 2008).
[26] 108 P.2d 401 (Cal. 1940).
[27] Pauw, 2000 U.S. Dist. LEXIS 22323 at *20.
APPENDIX
Asset Protection Variations Among
Jurisdictions Recognizing Tenancy by the Entirety
|
Alaska |
Type of Bar: Modified. |
Effect of Judgment Creditor of One Spouse: Levy and sale permitted. Partition may be forced.
Type of Property: Real and personal property. Alaska Stat. § 34.15.140 recognizes tenants by the entirety in real property. See Faulk v. Est. of Haskins, 714 P.2d 354 (Alaska 1986), recognizing tenants in the entirety in personal property.
Comment: Alaska Stat. § 09.38.100(a) provides that a creditor of one spouse “may obtain a levy on and sale of the interest” of the debtor spouse. The creditor may force partition or severance of the non-debtor spouse’s interest. This is subject, however, to other exemptions such as the homestead exemption. Alaska Sta. § § 09.38.100(a)-(b).
Arkansas
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Creditor may execute but may not defeat non-debtor spouse’s right of survivorship interest. Creditor gets one-half of rents and profits but cannot displace non-debtor spouse.
Type of Property: Real and personal property. “[O]nce property, whether personal or real is placed in the names of persons who are husband and wife, without specifying the manner in which they take, there is a presumption that they own the property as tenants by the entireties …” Sieb’s Hatcheries, Inc. v. Lindley, 111 F.Supp. 705, 716 (W.D. Ark. 1953). Ark. Code § 23-47-204 lists entireties as one of the accounts banks shall offer under the multiple party account rules.
Comment: “Execution against a spouse’s interest in a tenancy by the entirety has long been permitted even though partition has not. [Earlier cases have] affirmed the principle that property owned as husband and wife as tenants by the entirety may be sold under execution to satisfy a judgment against the husband, subject to the wife’s right of survivorship … [A] purchaser of the interest of one tenant by the entirety cannot oust the other tenant from possession, and can only claim one-half of the rents and profits. The remaining tenant is not only entitled to possession plus one-half of the rents and profits, but the right of survivorship is not destroyed or in anywise affected.” Morris v. Solesbee, 892 S.W.2d 281, 282 (Ark. Ct. App. 1995) (citations omitted).
Delaware
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: Not subject to attachment.Type of Property: Real and personal property. See Rigby v. Rigby, 88 A.2d 126 (Del. Ch. 1952), on cattle, and Widder v. Leeds, 317 A.2d 32 (Del. Ch. 1974), on partnership interest. “It has likewise been held that, in the absence of proof to the contrary, a joint bank account opened in the conjunctive form in the name of a husband and wife may create a tenancy by the entireties, and this status is not altered by the fact that either may withdraw the funds therefrom.” Widder, 317 A.2d at 35 (citations omitted).
Comment: Delaware courts have stated, at various times, that a judgment against one spouse does not create a lien on entireties property under Delaware law: “It is settled in Delaware that a creditor of one spouse, such as Ms. Johnson, may not place a lien on real property held as tenants by the entireties. See Steigler v. Insurance Co. of North America, 384 A.2d 398 (1978) ( “interest of neither [husband nor wife] can be sold, attached or liened ‘except by [their] joint act'”); Citizens Savings Bank, Inc. for the Use of Govatos v. Astrin, 61 A.2d 419 (1948)… so the creditors of one spouse cannot reach the interest the debtor holds in the estate.” Johnson v. Smith, No. Civ. A. 13585, 1994 WL 643131, *2 (Del. Ch. Oct. 31, 1994).
In Mitchell v. Wilmington Trust Co., 449 A.2d 1055 (Del. Ch. 1982), aff’d 461 A.2d 696 (Del. 1983), a husband obtained a mortgage from a bank by fraudulently bringing a woman to execute loan settlement documents that, in fact, was not his wife. The court held that the forgery failed to operate to bind the tenant by entirety property. Before the wife received notice of the forgery, the husband transferred the title to the wife as a marital settlement. The transfer was not held a fraudulent transfer because the wife lacked knowledge of the fraudulent transfer (being then unaware of the purported lien) and paid valid consideration (the release of her husband’s marital obligations). The court held that the bank acquired an inchoate lien in the property which became extinguished upon the husband’s transfer of the property to his wife without knowledge and for valid consideration. Given that no lien attaches in any event, there should have been no reason for the court to reach the fraudulent conveyance aspect of the case. In Wilmington Savings Fund Society v. Kaczmarczyk, No. Civ. A. 1769-N, 2007 WL 704937 (Del. Ch. March 1, 2007), the Chancery Court found that a post-judgment transfer by the debtor husband to his non-debtor wife violated the fraudulent conveyance act. As opposed to Mitchell, the Kaczmarczyk court held that the transfer, while purportedly made pursuant to the divorce discussions, did not include fair consideration because the parties reconciled. Arguably, neither case should have involved an examination of the fraudulent conveyance statute. These cases necessarily raise a cautionary note as to whether a lien attaches.
District of Columbia
Type of Bar: Full. Effect of Judgment Creditor of One Spouse: Not subject to attachment.
Type of Property: Real and personal property. See Morrison v. Potter, 764 A.2d 234 (D.C. 2000), where a joint checking account was presumed to be held by tenants by the entirety despite the right, under the account agreement, of either spouse to withdraw: “[C]ourts have not interpreted the unilateral right of a spouse to withdraw funds as an alienation of the marital property. Instead, ‘[w]here a deposit is made payable to either spouse, agency or authority exists by implication … Indeed, with respect to a joint bank account held by a husband and wife, each spouse acts as the other spouse’s agent, and both have properly consented to the other spouse’s withdrawals in advance, thus satisfying the non-alienation requirement of a tenancy by the entireties” (citations omitted).
Comment: In Est. of Wall, 440 F.2d 215 (D.C. 1971), the husband died holding a tenant by the entirety interest in a fund. The husband’s creditors unsuccessfully sought the estate’s “interest” in the fund: “[T]he full complement of common law characteristics of co-tenancy by the entireties is preserved. A unilaterally indestructible right of survivorship, an inability of one spouse to alienate his interest, and, importantly for this case, a broad immunity from claims of separate creditors remain among its vital incidents.” Id. at 219. In American Wholesale Corp. v. Aronstein, 10 F.2d 991 (1926), the husband’s transfer of his interest in entireties property to his wife was held not to be a fraudulent conveyance because the entireties property was not subject to a lien by his judgment creditors.
Florida
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real and personal property. See Beal Bank, SSB v. Almand & Assoc., 780 So.2d 45 (Fla. 2001), announcing a presumption in favor of entireties of joint bank account unless the signature card specifically disclaims a tenancy by the entireties: “[A]s we have explained, the 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.” This presumption, that jointly owned property held by a married couple is entireties, is rebuttable. In re Hinton, 378 B.R. 371 (Bankr. M.D. Fla. 2007).
Comment: In Passalino v. Protective Group Securities, 886 So.2d 295 (Fla. 2004), husband and wife owned rental property as tenants by the entirety. They sold the property and the proceeds were held by their attorney intended as a deposit on another tenants by the entirety property. The fund retained its tenant by the entirety characteristics and was not subject to the judgment solely against the husband. In Hunt v. Covington, 200 So. 76 (Fla. 1941), the Florida Supreme Court described the attributes of tenant by the entirety: “It is not subject to execution for the debt of the husband. It is not subject to partition; it is not subject to devise by will; neither is it subject to the laws of descent and distribution.”
Hawaii
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real and personal property. Haw. Rev. Stat. § 509-2 provides that land “or any other type of property” may be held tenants by the entirety. See Traders Travel International, Inc. v. Howser, 753 P.2d 244 (Haw. 1988), holding that the clear and unambiguous language of the signature card of “joint account” did not suggest entireties. That children were additional joint owners further rebutted any indication of entireties ownership.
Comment: In Sawada v. Endo, 561 P.2d 1291 (Haw. 1977), the husband was a judgment debtor due to a motor tort award against him. He and his wife subsequently transferred tenant by the entirety property to their sons. The Hawaii Supreme Court found that no lien attached to husband’s interest because he had no separate property interest in the property. Thus, the estate was not subject to the husband’s sole debt.
Illinois
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: No attachment to “homestead” entireties property.
Type of Property: Homestead real property only; see comment below for further explanation.
Comment: The tenancy was re-established in Illinois by statute and limited to homestead property. 765 ILCS § 1005/1c. By statute, 735 Ill. Comp. Stat. § 5/12-112, the debtor of one spouse cannot act against homestead entireties property. “Illinois stopped recognizing common law tenancy by the entirety in 1861 when married women’s law were first adopted. These laws recognized that women enjoyed rights independent of their husbands. In 1989, the Illinois General Assembly enacted a statute creating a tenancy by the entirety applicable only to ‘homestead property’ held by husbands and wives ‘during coverture.'” E.J. McKernan co. v. Gregory, 643 N.E.2d 1370, 1373 (Ill. App. 1994).
Indiana
Type of Bar: Full. Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real property and personal property “directly derived from real estate held by [tenants by the entirety], as crops produced by cultivation of lands owned by entireties or proceeds arising from sale of property (i.e., real estate) so held.” Rhodes v. Indiana Nat’l Bank, 544 N.E.2d 179, 180 (Ind. 1989) (holding that the personal property exception is very narrow so that rents are not subject to tenants by the entireties protection). The limitation to real property or to personal property directly derived from it produces fine distinctions. In Diss v. Agri Business Int’l, 670 N.E.2d 97 (Ind. 1996), the debtor husband transferred rental property to the wife and the transfer was set aside as a fraudulent conveyance because the rental income was not “personal property directly derived” from the realty. By statute, Ind. Code § 34-55-10-2(c)(5), entireties real estate is exempt from sale for the debt of one spouse.
Comment: In Myler v. Myler, 210 N.E.2d 446 (Ind. App. 1965), the husband owed child support arrearage from his first marriage. The husband’s mother subsequently transferred real estate to the husband and his second wife. The court held that the husband’s interest was not subject to his individual debts. There was no showing that he transferred his sole funds to acquire the property so no fraudulent conveyance was involved.
Kentucky
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Attachment only on the contingent survivorship interest.
Type of Property: Real and personal property. “It is recognized in this state that a person may by depositing his own money in the names of himself and another create the equivalent of a tenancy in common or a tenancy by the entirety, depending upon his intent.” Saylor v. Saylor, 389 S.W.2d 904, 905 (Ky. 1965). Saylor held that the conjunctive “and” is presumed to create tenancy in common while the disjunctive “or” created a presumption of entireties.
Comment: In Hoffmann v. Newell, 60 S.W.2d 607, 613 (Ky. 1932) the court permitted the sale of the husband’s contingent survivorship interest subject, however, to the wife’s right of life time enjoyment and her survivorship right: “We are of the opinion that, as the statute declares this contingent interest of the husband to be subject to sale for the judgment creditor’s debt, he takes the interest acquired upon its sale, subject only to the defeasance its very contingent nature demands, or its destruction through the wife’s survivorship of his judgment debtor.”
In Peyton v. Young, 659 S.W.2d 205 (Ky. 1983), a husband, but not the wife, mortgaged the entirety property. He subsequently transferred his interest to his wife. The court held that one-half interest carried with it the mortgage. He subsequently murdered his wife then committed suicide. The court treated the deaths as simultaneous and permitted the mortgage to be satisfied out of his one-half interest. If she had indeed survived him, however, the debt would have effectively extinguished because the right of the survivorship is seen as a core element of tenants by the entirety.
Maryland
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real and personal property. Bruce v. Dyer, 524 A.2d 777 (Md. 1987), evidences that entireties are favored by the law. See also Diamond v. Diamond, 467 A.2d 510 (Md. 1983) (“It is well established that this Court recognizes that a tenancy by the entireties may be created in personal property.”)
Comment: Watterson v. Edgerly, 388 A.2d 934 (Md. App. 1978) held that a creditor “has no standing to complain” when the debtor husband transferred all of his interest in a residence to his wife because it was held tenants by the entirety. In that case, the wife then provided that the residence go by Will to a spendthrift trust for husband’s benefit. The wife died 61 days after the transfer of the real estate to her. The intent to create entireties property, coupled with the four unities, causes the tenancy to be created. Cruickshank-Wallace v. Co. Banking & Trust Co., 885 A.2d 403 (Md. App. 2005). See, however, In re Pernia, 165 B.R. 581 (Bankr. D. Md. 1994), where the Bankruptcy Court held that the account designation trumped intent. In that case, proceeds from the sale of entireties property was used to acquire U.S. Treasury EE Bonds. The bonds were titled as held husband “or” wife. Treasury regulations stated that holding the bonds as such made them subject to the order of either spouse. The court found that the EE Bonds were not entirety property under Maryland law: “Both husband and wife are essential parties to an effective transfer of property held as tenants by the entirety.” Id. at 582. The federal regulations governing the account holdings were found to preempt “all laws and court decisions” because of federal preemption. Pernia was wrongly decided to the extent it claims to make a general pronouncement of Maryland law. Indeed, in In re Breslin, 283 B.R. 834 (Bankr. D. Md. 2002), the court stated that the Pernia result was “only because” the federal regulations determined ownership and referred to Brewer v. Bowersox, 48 A. 1060 (Md. 1901), for the proposition that when an account is held disjunctively but only payable to the two spouses, but subject to the order of either, an entireties account is created. Entireties exists if the couple so intends and the unities coincide, regardless of the nature of the account. See Cruickshank-Wallace, 885 A.2d at 413, Diamond, 467 A.2d 510; M. Lit, Inc. v. Berger, 170 A.2d 303 (Md. 1961). There is also a presumption that property purchased from the proceeds of entireties property retains its character. Tait v. Safe Deposit & Trust Co. of Baltimore, 70 F.2d 79 (4th Cir. 1934) (interpreting Maryland law).
Massachusetts
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Lien attaches but no execution if principal residence, otherwise may sell debtor’s share.
Type of Property: Real and personal property. After entireties property was condemned in Ronan v. Ronan, 159 N.E.2d 653 (Mass. 1959), the court held that the proceeds belonged to both the husband and wife. Under pre-1980 law, the husband was entitled to the income during their joint lives, and upon the death of either, the survivor was entitled to all of it.
Comment: Before a statutory fix, Massachusetts held to the “husband was the one” rule under common law. Therefore, the husband’s creditors could take possession of the property as long as the husband debtor lived, subject to the wife’s right of survivorship. Pray v. Stebbins, 4 N.E. 824 (Mass. 1886); Raptes v. Pappas, 155 N.E. 787 (1927). The state reversed this rule by statute, Mass. Gen. Laws ch. 209, § 1, providing that both “shall be equally entitled to the rents, products, income or profits and to the control, management and possession of property held by them as tenants by the entirety.” The statute also provided that a debtor spouse’s interest was not subject to seizure or execution “so long as such property is the principal residence of the nondebtor spouse.” Other than property serving as the principal residence of the non-debtor spouse, creditors may execute and sell entireties property after adjusting for the non-debtor spouse’s interest. Coraccio v. Lowell Five Cents Savings Bank, 612 N.E.2d 650 (Mass. 1993); In re Snyder, 249 B.R. 40 (B.A.P. 1st Cir. 2000).
Michigan
Type of Bar: Full
Effect of Judgment Creditor of One Spouse: No Attachment
Type of Property: Real property and its proceeds as well as certain enumerated personal property.
Comment: As with Massachusetts, Michigan was late in enacting a statute holding that both spouses “shall be equally entitled to the rents, products, income or profits, and to the control and management of real or personal property held by them as tenants by the entirety.” Mich. Comp. Laws § 557.71 (adopted in 1975). In SNB Bank & Trust v. Kensey, 378 N.W.2d 594 (Mich. 1985), the court held that rents from entirety property cannot be attached to satisfy the debts of one spouse’s creditors. In that case, the court held that the statute simply equalized the rights of both spouses to control the property and that the entireties property and its rents continued to be the property of the marital unit. Also by statute, certain jointly held debt instruments and stock certificates are exempt from attachment by one spouse’s creditors. Mich. Comp. Laws § § 557.151, 600.6023a. These statutes, in effect, recognized entireties in those enumerated debt and stock accounts. Zavradinos v. JTRB, Inc., 753 N.W.2d 60 (Mich. 2008); DeYoung v. Mesler, 130 N.W.2d 38 (Mich. 1964).
Mississippi
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real property.
Comment: Mississippi recognizes entireties in real property: “An estate by entirety may exist only in a husband and wife and may not be terminated by the unilateral action of one of them because they take by the entireties and not by moieties. While the marriage exists, neither husband nor wife can sever this title so as to defeat or prejudice the right of survivorship in the other, and a conveyance executed by only one of them does not pass title.” Ayers v. Petro, 417 So.2d 912, 914 (Miss. 1982). Thus, in Cuevas v. McCallum, 191 So.2d 843 (Miss. 1966), a husband purportedly conveyed his interest in tenant by the entirety property to his girlfriend in an attempt to lower his asset profile anticipating a divorce. The Mississippi Supreme Court held the transaction void because neither spouse could unilaterally alienate tenant by the entirety property. There are no cases, however, that discuss the rights of creditors of one of the spouse and whether the lack of moieties precludes attachment or merely means that a creditor takes subject to the survivorship interest of the non-debtor spouse. See Note, Rodger A. Heaton, Administration of Entireties Property in Bankruptcy, 60 Ind. L.J. 305, 309 n.24 (1985). Given the descriptions of entireties in the Mississippi cases, however, there is no reason to doubt that it is a full bar jurisdiction.
Missouri
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real and personal property. “It has been held in Missouri for some time that where a husband and wife hold personal property as joint owners they are presumed to be tenants by the entirety. Each is presumed to have an undivided interest in the whole of the property.”Hanebrink v. Tower Grove Bank & Trust Co., 321 S.W.2d 524, 527 (Mo. Ct. App. 1959); see alsoHallmark v. Stallings, 648 S.W.2d 230 (Mo. Ct. App. 1983) (recognizing entireties ownership in livestock).
Comment: In Hanebrink v. Tower Grove Bank & Trust Co., 321 S.W.2d 524 (Mo. Ct. App. 1959), a bank paid a garnishment against the husband alone from a tenant by the entirety account. The court held the bank liable to wife for the amount paid: “It is also the law in this state that where a judgment and execution are against the husband alone such judgment cannot in any way affect property held by the husband and wife in the entirety.” Id. at 527. That either spouse can draw on an account does not defeat the entireties: “Neither does the fact that either Dr. Coleman or his wife could draw checks on the account destroy their relationship as tenants by the entirety in the balance left in the bank. The drawing of the checks was by mutual consent.” State Bank of Poplar Bluff v. Coleman, 240 S.W.2d 188, 191 (Mo. Ct. App. 1951).
New Jersey
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Execution on judgment permitted subject to equity determination.
Type of Property: Real and personal property by statute, N.J. Stat. Ann. § 46:3-17.2. This statute, however, is found under the “Property” title (title 46), and “Real Property Only” subtitle (subtitle 2). Furthermore, state courts have questioned the existence of entireties ownership in personal property. For example, Fort Lee Savings & Loan Association v. LiButti, 254 A.2d 804, 807 (N.J. Super. App. Div. 1969), suggests that entireties ownership only exists in real property: “The estate by the entirety has been described as a ‘remnant of other times’ which rests upon ‘fiction of oneness of husband and wife’… But whatever social purpose this tenancy was designed to serve in the interest of married parties and whatever the reasons for its continued existence in this State, there is no justifiable basis for extending it to the personal property which replaces it. To indulge in the further fiction necessary to achieve such a result serves no useful purpose and acts to frustrate justice. Furthermore, it runs counter to the policy of this State against recognizing the existence of tenancies by the entirety in personalty.” (dissent by Judge Carton, adopted by the New Jersey Supreme Court on reversal, 264 A.2d 33 (N.J. 1970)). The Fort Lee holding was reaffirmed inHigh v. Balun, 943 F.2d 323, 325 (3d. Cir. 1991), when the court recognized that New Jersey law does not permit married couples to own personal property by the entireties.
Comment: The execution by the judgment creditor of one spouse acquires the survivorship interest of the debtor spouse and a tenant in common life interest without the automatic right of partition. Newman v. Chase, 359 A.2d 474 (N.J. 1976). In Newman, the court weighed the creditor’s interest against the “cost of dispossessing the family of its home.” Id. at 480. The court granted the creditor one-half the imputed net rental value of the house. Ultimately, the issue of partition is one within the equity court’s determination. “In the usual case involving residential property, the purchaser at the sale may cause neither a physical partition of the property nor a partition by sale of the life estate. The creditor may, however, collect from the non-debtor spouse one-half of the imputed rental value of the property, but must give credit to the non-debtor spouse for his share of certain charges against the property such as mortgage payments, taxes, insurance and repairs.” In re Jordan, 5 B.R. 59, 62 (Bankr. D.N.J. 1980).
New York
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Attachment permitted and sale allowed subject to equity determination.
Type of Property: Real property or co-op apartments only under statute, N.Y. Est. Powers & Trusts Law § § 6-2.1, 6-2.2. In Hawthorne v. Hawthorne, 192 N.E.2d 20 (N.Y. 1963), the New York Court of Appeals held that fire insurance proceeds from entireties property was personal property not held by the entireties. The court in Nat’l Bank & Trust Co. of Norwich v. Rickard, 393 N.Y.S.2d 801 (N.Y. App. Div. 1977), reached a similar result, finding that excess foreclosure proceeds were personalty held as tenants in common rather than as entireties.
Comment: A creditor may reach the debtor spouse’s interest and, under certain circumstances, may sell the interest: “[U]nder the authorities, the sale of the husband’s interest in the real property would convey a hybrid tenancy in common, with survivorship but no partition rights, to a third party stranger who then could have some conceivable right to use immediately an undivided one-half share of the property … It is, of course, unquestioned that the creditor has legitimate considerations in its favor … However, as a practical matter, its real interest is in asserting its lien in the event of a voluntary sale of the property, or in the husband’s possibility of surviving the wife. The creditor’s legitimate security interest is really protected by its judgment lien. This Court cannot visualize in this case any substantive value in immediate occupancy rights to anyone outside the close family.” Hammond v. Econo-Car of North Shore, 336 N.Y.S.2d 493, 494-95 (N.Y. Sup. Ct. 1972) (citations omitted). “As a practical matter, if this were the marital residence, petitioner-wife’s right to exclusively occupy the whole of the property unaffected by any attempted sale of her debtor-spouse’s interest therein goes without questions.” BNY Financial Corp. v. Moran, 584 N.Y.S.2d 261, 262 (N.Y. Sup. Ct. 1992) (staying collection activity on Hamptons vacation home to permit non-debtor spouse time to attempt private sale). In In re Levehar, 30 B.R. 976 (Bankr. E.D.N.Y. 1983), the Bankruptcy Court reviewed a proposed sale under Bankruptcy Code § 363 which permits such a sale if the Court finds the benefit to the estate outweighs the detriment of such sale to the co-owner. Levehar assumed that the co-owner non-debtor would be entitled to a share greater than 50% of the net proceeds based on her greater life expectancy, suggesting that such a sale would not be appropriate. Id. at 981. Implicit in Levehar, of course, is that the balancing test of § 363 might yield a different result under other fact situations. In re Persky, 134 B.R. 81 (Bankr. E.D.N.Y. 1991), after deciding that under no circumstance can the undivided right to survivorship be severed by such a sale, held the power to sell free of the non-debtor spouse’s survivorship interest unenforceable. This case is not followed generally. See Sapir v. Sartorius, 230 B.R. 650 (Bankr. S.D.N.Y. 1999).
North Carolina
Type of Bar: Full. Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real estate only. “Although North Carolina recognizes the right of husband and wife to hold real property as tenants by the entirety, it does not in general recognize the tenancy by the entirety in personal property. When husband and wife voluntarily sell and convey real property owned by them as tenants by the entirety, the proceeds of such are considered personal property … held by husband and wife as tenants in common.” In re Foreclosure of Deed of Trust Recorded at Book 911, at Page 512, Catawba Co. Registry, 272 S.E.2d 893, 896 (N.C. Ct. App. 1980) (citations omitted).
Comment: Dealer Supply Co. v. Greene, 422 S.E. 2d 350 (N.C. Ct. App. 1992), review denied 426 S.E.2d 704 (1993), involved a pre-divorce transfer by husband and wife to husband’s parents in exchange for a cash-out of the wife. “In North Carolina, it is well established that an individual creditor of either husband or wife has no right to levy upon property held by the couple as tenants by the entirety. It follows therefore that a ‘[h]usband and wife [can] by joint voluntary conveyance transfer the [entirety held] property to anyone of their choice, free of lien or claims of [one spouse’s] individual creditors.’ Further, as a debtor can only commit a fraudulent conveyance by disposing of property to which the creditor has a legal right to take in satisfaction of his claim, a husband’s conveyance of his interest in entirety held property cannot come within the prohibition against fraudulent conveyances.” Id. at 352 (citations omitted, alterations in original); see also L&M Gas Co. v. Leggett, 161 S.E.2d 23 (N.C. 1968). In Martin v. Roberts, 628 S.E.2d 812 (N.C. Ct. App. 2006), on the other hand, a transfer incident to divorce but made after the date of the divorce decree was held attachable because the entireties was severed by the time of the conveyance. N.C. Gen. Stat. § 39-13.6, enacted in the early 1980s, reversed the husband’s right to control the property during coverture.
Ohio
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: No attachment provided that the deed was created during a certain period.
Type of Property: Real property only under deeds created after February 9, 1972 and before April 4, 1985 pursuant to the former Ohio Rev. Stat. § 5302.17.
Comment: Prior to 1972, Ohio did not recognize entireties. By statute in 1972 it permitted husbands and wives to hold real estate as tenants by the entirety. Cases held that such tenancy precluded attachment by the creditor of one spouse: “[W]e unequivocally follow the majority of jurisdictions and hold that a judgment creditor of a married individual is precluded from enforcing that judgment by an action in foreclosure against real property that an individual debtor holds with his/her spouse in an estate by the entireties…” Koster v. Boucheaux, 463 N.E.2d 39, 47 (Ohio Ct. App. 1982). Likewise, in Donvitov v. Criswell, 439 N.E.2d 467 (Ohio Ct. App. 1982), a post-judgment transfer to the non-debtor spouse was not a fraudulent conveyance because the creditor had no attachable interest. As of 1984, a “survivorship tenancy” replaced tenants by the entirety which does not enjoy the entireties protection. Central Benefits Mutual Insurance Co. v. Ris Administrators Agency, 637 N.E.2d 291 (Ohio 1994). Although a co-tenant of a survivorship tenancy may not unilaterally defeat another’s right to the survivorship share, a judgment lien against one tenant converts the tenancy to tenancy in common. Ohio Rev. Stat. § 5302.20(c)(4). Tenancies by the entirety created while the 1972 statute was effective, however, shall be respected. Ohio Rev. Stat. § 5302.21.
Oklahoma
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Attachment permitted.
Type of Property: Real and personal property. Okla. Stat. Ann. tit. 60, § 74.
Comment: By statute, Oklahoma recognizes entireties. Okla. Stat. Ann. tit. 60, § 74. However, the statute provides: “Nothing herein contained shall prevent execution, levy and sale of the interest of the judgment debtor in such entireties and such sale shall constitute a severance.” A sale, not the attachment of a lien, severs the tenancy. Thus, if the debtor spouse dies prior to sale, the property passes to the survivor free of the debt. Toma v. Toma, 163 P.3d 540 (Okla. 2007). It appears that the Oklahoma version of entireties precludes voluntary transfer of an interest during coverture. SeeNote, Tom R. Russell, Title 60, Section 74 of the Oklahoma Statutes: A Unique Form of Tenancy by the Entirety, 58 Okla. L. Rev. 317 (2005).
Oregon
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Attachment subject to non-debtor’s right to possession and survivorship.
Type of Property: Real property only. Panushka v. Panushka, 349 P.2d 450 (Or. 1960), involved an executory contract on real property executed by husband and wife. The husband died before settlement and his interest went to his probate estate because the contract converted the holding to a right to the purchase price. The court refused to recognize entireties in personal property. But seeBedortha v. Sunridge Land Co., 822 P.2d 694 (Or. 1991), for a cautionary note on the conversion of real estate to personal property upon an executing contract of sale.Comment: Tenancy by the entirety is seen as a tenancy in common with an indestructible right of survivorship. Therefore the interest that a judgment creditor takes is an interest that may be defeated if the non-debtor spouse survivors the debtor. If the tenancy is terminated by divorce, however, the lien remains attached and the creditor may enforce its lien regardless of a divorce decree awarding the property to the non-debtor spouse. Brownley v. Lincoln Co., 343 P.2d 529 (Or. 1959). A creditor of one has an interest in the rents and profits and partition is not permitted. Stanley v. Mueller, 350 P.2d 880 (Or. 1960). In Wilde v. Mounts, 769 P.2d 802 (Or. Ct. App. 1989), the couple deeded the property to a family member after a judgment lien attached due to the debt of the husband alone. The court held that this out conveyance terminated the wife’s right of survivorship. Because the judgment lien attached to the husband’s interest, and because the interest was an interest in the whole (subject to the wife’s interest), the judgment lien thereupon attached to the whole. A later case, involving the allocation of a property damage award to the two co-tenants, held that each owns one-half of such proceeds in keeping with the view that entireties is a form of in common ownership. This ruling calls into questions the earlier holding in Wilde. McCormick v. City of Portland, 82 P.3d 1043 (Or. Ct. App. 2004).
Pennsylvania
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real and personal property. “The authorities thus cited would seem to show that either spouse presumptively has the power to act for both, as long as the marriage subsists, in matters of entireties, without specific authorization, provided that fruits or proceeds of such action inures to the benefit of both and the estate is not terminated. But neither may be such action destroy the true purpose of the estate by attempting to convert it or a part of it, in bad faith, into one in severalty.” Madden v. Gosztonyi Savings & Trust Co., 200 A. 624, 630-631 (Pa. 1938) (discussing a joint bank account).
Comment: In Sterrett v. Sterrett, 166 A.2d 1, 2 (Pa. 1960), the Supreme Court likened tenancy by the entirety property to a living tree “whose fruits they share together. To split the tree in two would be to kill it and then it would not be what it was before when either could enjoy its shelter, shade and fruit as much as the other.” It is not subject to the creditors of one spouse. There is some question as to whether an unenforceable lien attaches to the debtor spouse’s interest, subject to divestment. See In re Hope, 77 B.R. 470 (Bankr. E.D.Pa. 1987). In C.I.T. Corp. v. Flint, 5 A.2d 126 (Pa. 1939) a transfer by the debtor husband and non-debtor wife to a spendthrift trust for their benefit was found not to be a fraudulent conveyance because the creditor had no attachable interest in the property. The court’s holding was narrow however; it only decided the issue of the fraudulent conveyance and not whether, or to what extent, a creditor could reach the debtor’s interests in the self-settled spendthrift trust. Id. at 129.
Rhode Island
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Attachment permitted but not sale.
Type of Property: Real property. Applicability to personal property is uncertain, as there are no cases regarding personalty and entireties ownership.
Comment: In Broomfield v. Brown, 25 A.2d 354 (R.I. 1942), the Rhode Island Supreme Court held that the state’s married woman’s act merely permitted women to own property in any manner permitted by law, including as tenants by the entirety. Therefore, the judgment creditor of husband could not force the sale of the property. The courts, however, made a distinction between attachment and sale. It permitted the attachment to be recorded. Knobb v. Security Ins. Co., 399 A.2d 1214 (R.I. 1979). In Cull v. Vadnais, 406 A.2d 1241 (R.I. 1979), the court held that the lien attaches but no levy and sale permitted. In re Gibbons, 459 A.2d 938 (R.I. 1983), the court held that once the lien attaches, a third party will not be free of the debt. The death of the debtor spouse before the non-debtor spouse, however, permits survivorship free of the lien. The Bankruptcy Court in In re Furkes, 65 B.R. 232, 236 (Bankr. D.R.I. 1986), explained that the lien attaches “to a contingent future expectancy interest, and that said interest may be sold by the attaching creditor, if anyone can be persuaded to buy it.”
Tennessee
Type of Bar: Modified.
Effect of Judgment Creditor of One Spouse: Lien attaches to debtor spouse’s survivorship interest.
Type of Property: Real and personal property. Joint bank accounts subject to the order of either spouse may be entireties property. Grahl v. Davis, 971 S.W.2d 373 (Tenn. 1998); Sloan v. Jones, 241 S.W.2d 506 (Tenn. 1951) (relying on the reasoning in Madden v. Gosztonyi Savings & Trust Co., 200 A. 624 (Pa. 1938)).
Comment: The lien attaches to the survivorship interest only and it does not affect the present possessory interest. In re Arango, 992 F.2d 611 (6th Cir. 1993) (applying Tennessee law). InCitizens v. Southern Nat’l Bank, 640 F.2d 837 (6th Cir. 1981), the court found that the transfer of the tenants by the entirety property from the debtor spouse to the non-debtor spouse involved the transfer of the debtor spouse’s survivorship interest. This interest, explained the court, has “substantial value to the recipient spouse” so prejudice to the creditor is inferred. Id. at 839. The court therefore remanded the fraudulent conveyance issue.
U.S Virgin Islands
Type of Bar: Full. Effect of Judgment Creditor of One Spouse: No levy and execution.
Type of Property: Real property only. V.I. Code Ann. tit. 28 § 7.
Comment: In Masonry Products, Inc. v. Tees, 280 F.Supp. 654 (D.V.I. 1968), the court applied the majority rule that a creditor of one spouse may not “reach” that spouse’s interest in property held by the entireties during the joint lives of the spouses. Therefore, it passes free from the debt if the non-debtor spouse survives. The estate by the entireties was introduced by statute in 1957 with few interpretative cases so it cannot be determined if a lien attaches.
Vermont
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real and personal property. See Beacon Milling Co. v. Larose, 418 A.2d 32 (Vt. 1990), finding that a joint bank account could be held as entireties, notwithstanding the ability of either to unilaterally withdraw from the account.
Comment: Entireties property is not subject to the debts of one spouse. In re Pauquette, 38 B.R. 170 (Bankr. Vt. 1984). In Lowell v. Lowell, 419 A.2d 321 (Vt. 1980), an ex-wife could not use part of the value of the husband’s tenant by the entirety interest with his current wife to support an alimony claim because such property could not be available to cover his sole debts. See also Rose v. Morrell, 259 A.2d 8 (Vt. 1969). Under Vermont’s civil union statute, entireties ownership is extended to parties of a civil union. Vt. Stat. Ann. tit. 15 § 1204(e).
Virginia
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real and personal property. In Oliver v. Givens, 129 S.E.2d 661 (Va. 1963), the court found that the sale proceeds of entirety property continue to be held by the entireties and therefore the debtor spouse transferring his interest in the proceeds to his spouse was not a fraudulent transfer. “This is so for the obvious reason that creditors are not prejudiced by a gift of property which is exempt from their claims.” Id. at 664.
Comment: In Rogers v. Rogers, 512 S.E.2d 821 (Va. 1999), the Virginia Supreme Court held that tenancy by the entirety property could not be sold by a creditor who had two separate judgments (one against husband and one against wife). In that case, the judgments were separate but related. Judgment against the wife was entered because she participated with her husband in a scheme to hinder and delay the collection of the judgment against her husband. See also Bunker v. Peyton, 312 F.3d 145 (4th Cir. 2002), where the Court of Appeals in a consolidated bankruptcy case held that the separate creditors of husband and wife were not entitled to satisfy debts against the tenancy by the entirety property regardless of the generally commingling of their finances. Virginia has a statute that extends entirety protection to spouses holding property in revocable trusts under certain circumstances. Such property held in trust “shall have the same immunity from the claims of their separate creditors as it would had it remained a tenancy by the entirety, so long as (i) they remain husband and wife, (ii) it continues to be held in the trust or trusts, and (iii) it continues to be their property.” Va. Code Ann. § 55-20.2. The property had to be held, before the transfer into trust, as tenants by the entirety.
Wyoming
Type of Bar: Full.
Effect of Judgment Creditor of One Spouse: No attachment.
Type of Property: Real and personal property. Wyo. Stat. Ann. § 34-1-140. However, the “existence of a tenancy by the entirety will not be presumed by this court in the absence of an express intent to create the right of survivorship.” In re Anselmi, 52 B.R. 479, 487 (Bankr. D. Wyo. 1985).
Comment: In Colorado Nat’l Bank v. Miles, 711 P.2d 390 (Wyo. 1985), the court held that one spouse alone cannot subject tenant by the entirety property to a mortgage. “Entirety in this connection means indivisibility. The estate is owned not by one but by both as an indivisible entity …” Ward Terry & Co. v. Hensen, 297 P.2d 213, 215 (Wyo. 1956).
