Citation. 949 F.2d 73 (3d Cir. 1991)
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Brief Fact Summary.
The Government sued to determine whether the innocent spouse possessed rights in property held by tenancy by the entirety. One spouse violated a federal statute that allowed the government to force forfeiture of property held by an individual who violated the statute.
Synopsis of Rule of Law.
To preserve the goals of the statute, the innocent spouse has rights of survivorship and this prevents attachment by the guilty spouse’s creditors.
In 1989, the United States filed suit seeking civil forfeiture of property held by husband and wife in tenancy by the entirety. The government alleged that the Mr. Bernstein, the owner had used the property for illegal purposes. Mrs. Bernstein alleged an “innocent owner” defense and argued that because the property was held in tenancy by the entirety, she was entitled to keep the property. The district court held that the United States was not entitled to forfeiture of any interest in the property.
Whether the interest of one spouse in real property, held in tenancy of the entirety is divisible or must be forfeited if the other spouse violates a statute requiring forfeiture of the property.
Reversed and remanded to the trial court. The trial court must determine whether the guilty spouse’s interest is subject to forfeiture, but also must preserve the innocent spouse’s right to exclusive use and protection against conveyance.
The guilty spouse immediately forfeits his interest and the innocent owner retains full use and possession of the property during his or her lifetime.
The innocent owner is also protected against any conveyance without his or her consent or any attempt to levy upon the interest formally held by the guilty spouse.
The innocent spouse also retains the right to obtain title in fee simple absolute if he or she is predeceased by the guilty spouse.
The court started by analyzing the statute and stating that it was susceptible to opposite interpretations when it came to tenancy by the entirety. The court decided on an interpretation they felt preserved the two goals of the statute as well as the established legal principles of tenancy by the entirety.