Luxury Homes and Estates of Florida
In prior articles I have explained that assets owned by both husband and wife cannot be attached or sold to satisfy a creditor of only one spouse. Marital assets are protected in the State of Florida unless the creditor can show an obligation of both husband and wife.
Likewise, an asset solely owned by one spouse is not available to satisfy a creditor unless the same spouse is obligated to the creditor.
However, often when persons marry the husband or wife will give monies to their spouse to buy land or personal properties. If the spouse takes the title to the property in his own name, his judgment creditors may wrestle for control of the asset.
The creditor will argue that the new found property is owned by the debtor and available to satisfy the judgment.
However, in this circumstance the court recognizes that a resulting trust may be created by implication and deny the creditor a recovery.
The monies from the non-obligated spouse do not lose protection merely because an asset is purchased in trust. The fact that the debtor took the asset in his own name is conclusive. The court will determine where the monies came from to buy the asset (i.e., solely from the exempt spouse). Second, the court will examine the intent of the transaction. For example, if the wife gave the husband money to buy property and the husband purchased the property in his own name as a matter of convenience or as a representative of his spouse or family, the property will remain exempt from creditors.
A creditor enjoys the right to collect from assets owned by a debtor. In a resulting trust the asset was never owned by the debtor. Therefore, the asset is immune from collection activities.
The burden of establishing a resulting trust lies squarely on the shoulders of the spouse seeking to avoid collection.
The services of an attorney may be sought to safeguard the assets. However, when unsophisticated individuals engage in transactions the claims of a creditor may arise and ultimately require a trial to establish the parties’ intent respecting ownership of the asset.
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Houston Short grew up in the Central Florida area, and continues to reside in Orlando with his family. He provides representation in arbitration actions for the American Arbitration Association and engages in alternative dispute resolutions including mediation both binding and non-binding arbitration, and settlement negotiations. He is an active member of the American Arbitration Association Panel Review Committee, the Orange County Bar Association, and the Florida Bar. He graduated from Florida State University in 1984 with a bachelors of science degree (cum laude) and received his juris doctor from the University of Florida in 1987 (with honors). Houston co-authored, "The Constitutionality of the Legislatures Mandate to Sever Counterclaims in Mortgage Foreclosure Action," the Real Property, Probate and Trust Law Section, The Florida Bar.