Tenancy by the entirety, also known as tenants by entirety or tenancy in entirety, is a legal concept that applies to married couples who purchase property together.
This form of ownership has some unique characteristics that distinguish it from other types of ownership, such as joint tenancy and tenancy in common. In this blog, we’ll explore the important rules and characteristics of tenancy by the entirety.
What Is Tenancy by Entirety?
Tenancy by the entirety is a form of joint ownership that’s available only to married couples. In a tenancy by the entirety, each spouse owns an undivided interest in the property, and they are considered one legal entity.
This means that neither spouse can transfer or sell their share of the property without the other spouse’s consent. All in all, if one spouse dies, the surviving spouse automatically inherits the deceased spouse’s share of the property.
Some states in the United States recognize tenancy by the entirety, but not all. In other states, it typically serves as the default form of ownership for married couples unless they specify otherwise.
In some states, tenancy by the entirety is only available for certain types of property, such as real estate.
Tenancy by Entirety vs. Joint Tenancy
People often compare tenancy by the entirety to joint tenancy, which is another form of joint ownership available to both married and unmarried individuals. In a joint tenancy, each tenant owns an equal share of the property, and they have the right of survivorship.
This means that if one tenant dies, their share of the property automatically goes to the other tenant or tenants. The key difference from a joint tenancy is that it considers the two spouses as one legal entity.
Chiefly this means that neither spouse can transfer or sell their share of the property without the other spouse’s consent, and the right of survivorship applies only to the surviving spouse.
Tenancy by Entirety vs. Tenancy in Common
Another form of joint ownership is tenancy in common. In a tenancy in common, each tenant owns a distinct and separate share of the property.
This means that each tenant can sell or transfer their share of the property without the other tenants’ consent. If one tenant dies, their share of the property goes to their heirs or beneficiaries, rather than to the other tenants.
The key difference between tenancy by entirety and tenancy in common. It is that two spouses are considered one legal entity. And neither spouse can transfer or sell their share of the property without the other spouse’s consent.
Important Rules of Tenancy by Entirety
There are several important rules that apply to tenancy in its entirety. These rules can vary depending on the state where the property is located, but here are some of the most common ones:
Only available to married couples:
As mentioned earlier, tenancy by the entirety is available only to married couples. Unmarried couples or other types of relationships cannot use this form of ownership.
Both spouses own an equal share:
In a tenancy by the entirety, both spouses own an equal share of the property. This means that they both have an undivided interest in the entire property.
Cannot sell or transfer shares without consent:
Neither spouse can sell or transfer their share of the property without the other spouse’s consent. This is because the two spouses are considered one legal entity, and any transfer or sale would affect the entire entity.
Right of survivorship:
If one spouse dies, the surviving spouse automatically inherits the deceased spouse’s share of the property. This means that the property will not go through probate, and the surviving spouse will become the sole owner of the property.
Protection from creditors:
In some states, property held in tenancy by the entirety is protected from the individual debts of one spouse. This means that if one spouse incurs a debt or legal judgment, their creditors cannot place a lien on the property held to satisfy that debt.
However, it’s important to note that this protection is not absolute and may vary by state.
Limited to Married Couples:
As mentioned earlier, only married couples can use tenancy in the entirety. Any other type of joint owner or unmarried couple, siblings, or friends, cannot use it.
Termination upon Divorce:
Tenancy by the entirety is terminated upon divorce, and the property held in this manner automatically becomes a tenancy in common.
This means that each spouse would own a separate and divisible interest in the property. And either spouse would be able to sell or transfer their interest without the other spouse’s consent.
State-Specific Rules:
The rules regarding this can vary by state. And it’s important to consult with an attorney to understand the specific laws and requirements in your area.
Some states may not recognize it at all. While others may have specific requirements for how the property must be titled and how joint ownership must be established.
Tenancy By The Entirety vs. Other Types of Joint Ownership
Tenancy by the entirety is just one type of joint ownership available to property owners. Here are some key differences between other type 4es of joint ownership:
- Tenancy in Common: Tenancy in common is another type of joint ownership where multiple owners each have a distinct and divisible interest in the property. Tenancy in common is not limited to married couples and can be used by any group of owners.
- Joint Tenancy: Joint tenancy is a type of joint ownership where each owner has an equal and undivided interest in the property. However, any group of owners can use it and unlike this, joint tenancy does not offer protection from individual creditors.
Final Word
Tenancy by the entirety is a unique form of joint ownership that offers certain legal protections to married couples.
While it may not be suitable for everyone, it’s important to understand the advantages and disadvantages of this type of ownership and to consult with an attorney to determine whether it’s the right choice for your specific situation.
Frequently Asked Questions
Which tenancy is best for married couples?
The best form of tenancy for married couples depends on their goals and circumstances. It's advisable to consult with a lawyer or financial advisor to determine whether tenancy by the entirety or joint tenancy with right of survivorship is the best fit for your needs.
What is the disadvantage of tenants by the entirety?
One disadvantage of tenancy by the entirety is that it may not be the most advantageous form of ownership for all married couples, particularly those in non-community property states. Additionally, if one spouse incurs a debt or legal obligation that is unrelated to the property, the other spouse's interest in the property may still be at risk.
What is the difference between tenants by entirety and rights of survivorship?
Tenancy by the entirety and rights of survivorship are both forms of joint ownership, but they differ in the way that the surviving owner inherits the property. With tenancy by the entirety, the surviving spouse automatically inherits the property, while with rights of survivorship, the surviving owner inherits the property regardless of their relationship to the deceased owner.
.webp)
