When it comes to protecting your wealth, one important question is whether creditors can access funds held in a joint bank account. If you are concerned about safeguarding your financial future, call or visit your Hallandale asset protection lawyer at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. today. We can help develop various strategies to protect your long-term wealth.
Joint bank accounts do not have automatic protection from a creditor of one account owner under Florida law. A creditor with a judgment against one account owner can and will garnish a joint bank account to satisfy that judgment. The bank will freeze the joint account in response to the garnishment order, even if one of the account owners doesn’t owe the debt. Whether the money in a joint account is protected from creditors under Florida law depends on various factors.
Ownership of Money in a Joint Account
Courts often presume that a joint account holder can withdraw all the funds in a joint bank account. Therefore, a creditor is often not limited to one account owner’s “half” of the funds in a joint account unless the owner who does not owe the debt can prove that some or all the funds in the account belong exclusively to them, or the account has a special status.
Joint Accounts for Married Couples and Tenancy by the Entirety
A married couple can hold a joint bank account as “tenancy by the entirety,” which is a special status that protects the funds in that account if only one spouse owes a debt to a creditor. This type of ownership treats the couple as a single, indivisible legal unit. As a result, a creditor of one spouse cannot reach the funds in a joint bank account held as “tenancy by the entirety.” However, if the couple owes a joint debt, the creditor can reach funds in a joint bank account, even if the account is held as a “tenancy by the entirety.”
A bank account can only be a “tenancy by the entirety” if it meets the following requirements:
- The joint owners are a married couple.
- Both spouses have the same ownership interests in the joint account.
- Both spouses’ names appear on the account.
- The account is intended to benefit the married couple jointly.
- The account agreement does not exclude “tenancy by the entirety” ownership.
Until recently, a bank account had to be set up simultaneously by both spouses to properly be owned as tenancy by the entireties. However, the Florida Supreme Court recently held that a bank account can be owned by a tenancy by the entireties, even if it was originally opened only by one spouse.
If set up correctly, a bank account held by a married couple as a “tenancy by the entirety” can be an effective way to shield assets from a creditor of one spouse.
Joint Accounts with Individuals Other than Spouses
Many people have joint accounts with children, parents, or even roommates. However, adding a non-spouse owner to a joint account rarely provides any asset protection. For example, if you have money in a joint account with your child, and a creditor sues your child for an unpaid debt, that creditor can seek to garnish the entire account. The bank will freeze all the money in the account, at least until you can prove what money in the account belongs to you.
Exempt Funds in Bank Accounts
Some funds in joint bank accounts may be exempt from most creditors under state or federal law. The best way to protect these exempt funds is to deposit them directly in a separate bank account and not mix them with non-exempt funds. Otherwise, it can be difficult to trace which funds are exempt and which are non-exempt.
Frequently Asked Questions (FAQ)
Can I remove my name from a joint account to avoid creditor claims?
Removing your name from a joint account after a creditor has already obtained a judgment will not necessarily protect the funds. Courts may view this as an attempt to avoid debt collection, and the bank may still freeze the account. Proactive planning—such as structuring accounts correctly before any issues arise—is far more effective than reactive measures.
How can I prove which funds in a joint account are mine alone?
If a creditor garnishes a joint account, the burden is on the non-debtor account holder to show that certain funds are exclusively theirs. Proving this often requires clear documentation, such as pay stubs, deposit records, or statements showing the source of the money. Without proof, courts may presume all funds are available to satisfy the debtor’s obligations.
Are there safer alternatives to joint accounts for asset protection?
Yes. Depending on your circumstances, options such as separate individual accounts, trusts, or accounts structured as tenancy by the entirety (for married couples) may provide stronger protection. Consulting with an asset protection attorney can help you choose the best strategy to safeguard your wealth while still meeting your financial and family needs.
Protect Your Assets with Confidence
Navigating the complexities of joint bank accounts and asset protection from creditors requires more than just awareness—it demands proactive planning. At Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A., our Boca Raton asset protection attorneys are dedicated to helping high-net-worth individuals safeguard their wealth, their families, and their legacies. From estate planning and business succession to strategies that shield assets from potential liabilities, we provide the guidance you need to secure your financial future.
Take the first step toward lasting protection—call us today at (954) 966-2112 or contact us online to schedule a confidential consultation.