You may be wondering if a joint bank account can be garnished in Florida?
Maybe your account has been garnished already or you’re planning on creating a joint account with someone else like your wife for asset protection.
Short answer: While a joint account can certainly be frozen during a garnishment proceeding, whether it can be garnished or not depends on the type of bank account and whom the judgment is against.
Types of Joint Bank Accounts And Whether Garnishable
There are a few different ways that a joint bank account can be set up. Depending on what you choose, this will determine if it can be garnished.
1. Tenancy by the Entirety
Tenancy by the Entirety (“TBE”) is a unique type of property ownership that’s only allowed with married couples. The spouses own the property as a single unit and have a 100% interest in the property. They also have the right of survivorship, so that if one spouse dies, the entire property transfers to the other.
Accounts owned by a husband and wife as TBE cannot be garnished for a judgment debt of only one spouse, with some exceptions such as by special creditors like the IRS who have their own statutes to seize property or instances of fraud. If the judgment is against both spouses, then the account is fair game.
Keep in mind, the account can still be frozen by the bank if served with a writ of garnishment. You’ll need to wait for either the court or creditor to release the account. You’ll also need to make sure to file your exemptions from garnishment and comply with the time periods set out in Chapter 77 of the Florida Statutes. Otherwise, this exemption can be waived.
Note: This section of my blog post assumes your tenancy by the entirety account is set up properly. Keep in mind, certain elements need to be met for an account to be considered TBE. However, Florida law has become more favorable now with bank accounts.
When a married couple holds funds in a joint bank account, there’s a rebuttable presumption that the account is held as TBE. This authority is reflected in section 655.79(1), Fla. Stat., which states, in part, “Any deposit or account made in the name of two persons who are husband and wife shall be considered a tenancy by the entirety unless otherwise specified in writing.”
As mentioned in the statute, one exception to this presumption is if the terms of the account expressly disclaim that it’s held as tenancy by the entirety such as on the signature card.
You can also lose the tenancy by the entirety protection, for example, if you get divorced or your spouse passes away.
2. Tenancy in Common
Due to each owner having their own separate share, each of the owner’s individual interests are subject to the claims of creditors. As a result, a bank account held as tenancy in common is subject to garnishment to the extent of the judgment debtor’s interest in the account.
Property that was protected as tenancy by the entireties can become a tenancy in common when the spouses get divorced.
3. Joint Tenancy with Right of Survivorship
Joint tenancy with right of survivorship is another form of property ownership where the co-tenants must all have the same percentage ownership. Additionally, when one co-tenant passes away, their interest goes to the surviving joint tenant(s). This helps avoid probate.
However, just like tenancy in common, property that is held as a joint tenancy with right of survivorship can be garnished by a judgment creditor of one of the joint owners to the extent of their interest in the account in order to satisfy the judgment debt.
Depending on the way your bank account is set up, this will determine whether it is garnishable.
Normally, a tenancy by the entirety bank account cannot be garnished for the debt of one of the spouses (with some exceptions mentioned), although it can be frozen in the meantime until resolved. If the spouses have a joint judgment debt, then it can be garnished.
On the other hand, an account held as tenancy in common or joint tenancy with right of survivorship can normally be garnished by a judgment creditor of one of the owners to the extent of their interest in the account.