tenancy by the entirety for liability protection

[waterlife]

If a vacation home is held in tenants by the entirety, and someone is injured there, could a lawsuit reach accounts that either spouse owns individually?

[toddthebod]

If a vacation home is held in tenants by the entirety, and someone is injured there, could a lawsuit reach accounts that either spouse owns individually?

This sounds backwards to me. If one spouse has debts, the creditor cannot come after the vacation home, but I don't see any reason why the reverse would be prevented. Maybe the creditor would be limited to recovering 50% from each spouse?

[waterlife]

If a vacation home is held in tenants by the entirety, and someone is injured there, could a lawsuit reach accounts that either spouse owns individually?

This sounds backwards to me. If one spouse has debts, the creditor cannot come after the vacation home, but I don't see any reason why the reverse would be prevented. Maybe the creditor would be limited to recovering 50% from each spouse?

Thank you. This is backwards of the way the risk is often though of.

[123]

In a litigation all owners would likely be sued. In a community property states spouses share responsibility for certain marital debts (which could include litigation judgements). Likely lots of variations possible depending on state law and specifics of ownership and situation. Best advice is to consult an attorney.

If there is enough money involved it is likely easy to pierce the veil of separate property unless the couple has been extraordinary rigorous and thorough in establishing and maintaining it. Just the way an account is titled is not much of a barrier to an attorney motivated by a share of the proceeds.

[FoolishJumper]

IANAL and property ownership protections vary state by state, but tenancy by the entirety is simply a way that real estate (and in some states non-real estate) is owned. I know in my state, tenancy by the entirety protects that real estate from judgements against one owner. That is to say only joint judgements against both owners can lead to a lien and therefore foreclosure on the property.

This advantage of TbtE isn't to say that there couldn't be individual judgements (for an injury at the property) against each spouse that could target assets of the individual owners, but those individual judgements could not lead to a foreclosure of property held under tenancy by the entirety. Only joint judgements could lead to that outcome.

I would strongly suggest you speak to a lawyer if you think TbtE is a form of liability protection. It just (partially) protects that one property from foreclosure - it does not protect from legal liability the individuals who own it.

[FoolishJumper]

If there is enough money involved it is likely easy to pierce the veil of separate property unless the couple has been extraordinary rigorous and thorough in establishing and maintaining it. Just the way an account is titled is not much of a barrier to an attorney motivated by a share of the proceeds.

IANAL, but the claimed advantages I see of tenancy by the entirety (I'll reiterate 'in my state') are that judgements against one owner cannot force the other to sell (which includes a property being foreclosed on due to a lien that is against an individual owner). The mutual ownership of the entire property means that we are speaking to the exact opposite of separate property. We are speaking of joint property that cannot be separated without transferring ownership of the property to some form of joint tenancy (?) which could then be foreclosed on a portion of the property owned by that individual with a judgement against them.

IANAL (!!) but I would agree that the most likely outcome of a lawsuit for injury would be that John Doe, Jane Doe, and John and Jane Doe as joint owners would likely be sued to cover all bases. In whatever case, John and Jane Doe should both have liability protection if they are concerned about the possibility of being sued. Someone with a vacation home sounds like someone who would do well with some reasonable amount of umbrella protection for this.

[bsteiner]

Here's a good article on this subject: https://www.youngmoorelaw.com/wills-est ... -entirety/

[petulant]

If a vacation home is held in tenants by the entirety, and someone is injured there, could a lawsuit reach accounts that either spouse owns individually?

TBE does not provide any protection in the situation you describe, i.e. it provides no inside liability protection.

[waterlife]

Thank you all!