Missouri is one of a handful of states that observes the doctrine of tenants by the entireties.
What this means is that property – be it a bank or other financial account, real estate, motor vehicle or anything else – that is owned by a husband and wife on the title, is owned as tenants by the entireties, and upon the death of one, the other automatically takes title, without probate, without respect to a will, or lack thereof, or any other consideration.
Another aspect of tenants by the entireties is that entireties property – owned by husband and wife – is deemed to be part of its own estate, separate and apart from that of either one of them, and creditors of only one of the two entireties co-owners cannot seize or execute upon entireties property, or any part of it, in satisfaction of a claim against only one of the parties.
This provides protection against a spouse with respect to a claim against only one of them, such as where there may be no or inadequate insurance coverage for an actionable liability claim against one of the spouses, or for extensions of credit where only one of two spouses are potentially liable obligors, as with a credit card that only one of the parties contracted for.
This is why, in Missouri, financial creditors, like mortgage companies, lenders and account creditors, generally require both husband and wife to sign off on a financial arrangement, so as to permit the creditor to invade entireties assets in the event of default.
The entireties doctrine also calls into play, from time to time, the common law necessaries doctrine, which Missouri observes, which says that a married person is liable for necessaries provided to his or her spouse, even where they did not agree to pay or sign for them.
This often comes up in the area of medical care and treatment, where the unpaid medical services provided to a married person can be enormous, and the hospital’s only chance of satisfaction is against entireties property, like the parties’ house or financial accounts held in the entireties, as husband and wife.
The necessaries doctrine provides health care providers an avenue to make a civil claim against both a husband and a wife, even though services were provided to only one of them, on the theory that the medical treatment was necessary, and therefore both spouses may be held liable.
This issue has led to some cases on the books where the issue was: did the service provider prove that the services were actually necessary, so the other spouse can be held liable too? Cases go both ways, sometimes finding, with minimal proof of necessity that, yes, judgment can be rendered against both husband and wife, permitting execution on their entireties property, like their jointly owned house, bank account and the like.
Some cases have likewise held that just by proving medical services were rendered to one spouse, that does not satisfy the requirement of proving they were necessary, so as to hold the spouse liable, thereby protecting the parties’ entireties assets from execution and collection.
All in all, married couples go through life without a thought that owning their assets as husband and wife, as most couples do, may provide them distinct legal benefits upon their death, or in the event of unforeseen liability or tragic consequence, that could affect their financial security.
Ken Garten is a Blue Springs attorney. Email him at firstname.lastname@example.org.