Skip to main content

Tenants by the Entireties Assets and Missouri Qualified Spousal Trusts

By Barton E. Saettele

You may have seen a bank account statement that shows the account owned by two people as “joint tenants with rights of survivorship” or “JTWROS.” This means that both account owners have access to the account and, upon the death of one of them, the entire account is automatically transferred to the surviving owner. This same kind of ownership can apply to other kinds of assets.

Missouri has an additional form of joint ownership which has this survivorship feature. It is only available for married couples, and is known as “tenancy by the entireties.” This form of ownership is similar to ownership by joint tenants with right of survivorship in many respects, but it also provides married couples with one big benefit that is not provided by the joint tenants with right of survivorship manner of ownership. That benefit is protection from creditors who have a claim or claims against one, but not both, of the spouses.

Where a creditor has a claim against only one spouse, assets owned by the spouses as tenants by the entireties are generally not subject to that creditor’s claims. This is an attractive form of ownership for many people, including those in certain professions that have a higher probability of being sued, such as physicians.

In the past, one potential downside to Missouri married couples owning assets as tenants by the entireties was it was not clear whether the creditor protection existed if the asset was transferred to a revocable joint trust (which is a type of trust that both spouses have an interest in, commonly used for estate planning purposes). Because of this, it was more difficult for Missouri married couples with tenancy by the entireties assets to enjoy all the benefits that revocable joint trusts provide.

In 2011, this problem went away when Missouri passed a new statute that authorizes what are referred to as “qualified spousal trusts.” These trusts are revocable trusts in which both spouses have an interest. The statute makes it clear that any tenancy by the entireties assets the spouses transfer into a qualified spousal trust retain the tenancy by the entireties creditor protections while the spouses are both alive.

Many Missouri estate planning practitioners like these qualified spousal trusts because they offer Missouri married couples the benefits of a revocable joint trust and the benefits of tenancy by the entireties protections at the same time. The estate planning attorneys in St. Louis and Clayton, MO at Paule, Camazine & Blumenthal can assist you to determine the right estate planning tools for your needs.


I need a consultation

Leave a Reply