The ancient Common Law considered a husband and wife to be one person for purposes of property ownership. Both husband and wife were held to have a "tenancy by the entirety" in all the property that they jointly owned. Modern Virginia law has largely abandoned this characterization of a married couple as a single legal entity, but the peculiar legal arrangement of tenancy by the entirety still exists.
If husband and wife hold property in a tenancy by the entirety, the joint property is completely immune to the claims of a creditor of one spouse alone. Only a creditor of both husband and wife may subject the property to a lien or judgment. Virginia law allows virtually any kind of property to be held as a tenancy by the entirety, not just real estate. In the case of Pitts v. U.S., the U.S. 4th Circuit Court of Appeals held that the proceeds of a sale of real estate which was held by a tenancy by the entireties are likewise considered to be held by the entireties, even if the proceeds are in some form other than cash, such as deed of trust note.
Joint bank accounts are governed by special rules that do not recognize a tenancy by the entirety per se but do afford some protection to married couples. Virginia law presumes that joint bank accounts are divided equally between husband and wife, even if one spouse has deposited a substantially greater amount than the other. This means that a creditor of a single spouse generally can only assert a claim against one half of the amount in the joint account, even if the other spouse has deposited much more in the account.
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The above is not meant to replace legal counsel. To speak with an attorney, contact Gross & Romanick directly by filling out their online form, emailing law@gross.com or calling (703) 273-1400.
