Aranda: New Tenants by the Entireties Case

On December 3, 2010, Judge Paul Hyman decided an important tenancy by the entireties case. In re Aranda, 2010 Bankr Lexis 4264, (case no 08-26059). In this Southern District of Florida bankruptcy case, West Palm Beach division, Judge Hyman upheld the exemption of tenancy by the entireties in property that was also claimed as homestead even though the deed was ambiguous as to how title was taken. Additionally, this case is important because it discusses the differences between the new bankruptcy restrictions on the Florida unlimited homestead exemption and the tenancy by the entireties protection under Florida law.

Property owned as husband and wife is owned as tenants by the entireties. There are many issues as to whether a court would consider property as owned in this manner, but if the tenancy by entireties applies, then a debt of one spouse cannot be recovered against property owned as husband and wife as tenants by the entireties. As a Fort Lauderdale bankruptcy attorney, I understand that tenants by entireties provides a strong tool under Florida law to retain property in bankruptcy.

Judge Hyman upheld the tenancy by the entireties in homestead property even though there were recent efforts to clarify the title by executing several deeds on the property. The trustee, Michael Bakst, had argued that the 10 year look back period enacted by BAPCPA would defeat the exemption. BAPCPA restricted homestead rights if there had been a fraudulent transfer into the homestead during the past 10 years. Judge Hyman ruled this restriction on homestead exemptions does not apply to tenancy by the entireties property. Similarly, the new dollar limits established in BAPCPA for recently acquired homestead do not apply to tenancy by the entireties. For more details on BAPCPA and other case law consistent with Judge Hyman’s decision, see my article for attorneys on homestead at www.solomonlawoffice.com



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