Tenancy by Entirety

When preparing to buy, you must tell your title company or attorney exactly how you want the deed to read. Most states require specific language such as, “John Doe and Jane Doe, as husband and wife, as tenants by the entirety.” If the wording is vague, the law might default your ownership to “Joint Tenancy,” and you could lose your valuable creditor protections.

TBE is a durable form of ownership, but it can be ended in four ways:

1. Death: The surviving spouse becomes the sole owner (Tenancy in Severalty).

2. Divorce: Upon a final decree, the title usually converts to a “Tenancy in Common,” where each person owns 50%.

3. Mutual Agreement: Both spouses sign a new deed to change the ownership type.

4. Joint Conveyance: Both spouses sign a deed to sell the home to a new buyer.

In the nine “Community Property” states (like California and Texas), assets acquired during marriage are owned 50/50. Unlike TBE, community property does not always include an automatic right of survivorship (though some states offer “Community Property with Right of Survivorship”). Additionally, community property is often liable for the debts of either spouse, making TBE the superior choice for asset protection where available.

While both offer “rights of survivorship,” the key difference is creditor protection. In a standard Joint Tenancy, if one owner is sued, the creditor can force a sale of the home to collect that person’s 50% share. In TBE, the home is generally shielded from individual creditors because neither spouse is considered to own a “separable” share.

• Inflexibility: You cannot sell your “share” of the house to a third party or leave it to your children in a will if your spouse is still alive.

• Joint Debt Risk: If both spouses are sued together (for example, in a car accident where both were present or liable), TBE provides zero protection from that judgment.

• Termination Issues: If you move to a state that doesn’t recognize TBE, your ownership status may automatically convert to a less-protected “Joint Tenancy.”

• Asset Protection: In most “full bar” states, a creditor of only one spouse cannot place a lien on or seize the home. Only joint debts (debts both spouses signed for) can touch the property.

• Probate Avoidance: The property transfers instantly to the survivor without the cost or delay of court proceedings.

• Mutual Control: One spouse cannot secretly sell or take out a second mortgage on the home.

TBE is not available in every state. Currently, about half of the U.S. states recognize it, including Florida, Maryland, New Jersey, New York, Pennsylvania, and Virginia. Some states, like Illinois, only allow TBE for a couple’s primary residence (homestead), while others allow it for all types of real estate and even bank accounts.

To qualify for TBE, you must meet the “five unities”:

1. Marriage: You must be legally married at the time you acquire the property.

2. Title: Both spouses must receive the title through the same deed.

3. Time: Both spouses must acquire their interest at the same time.

4. Interest: Both spouses must have an equal and undivided interest.

5. Possession: Both spouses must have a mutual right to use and occupy the whole property.

TBE operates on the “right of survivorship.” If one spouse passes away, the property does not go through probate. Instead, the legal title automatically and immediately shifts to the surviving spouse. Furthermore, because the spouses are considered a single owner, neither person can sell, mortgage, or transfer their interest in the home without the written consent of the other.

Tenancy by the Entirety is a form of concurrent property ownership designed exclusively for married couples. It is based on the legal fiction that a husband and wife (or spouses) are a single unit. Because of this, each spouse does not own “half” of the property; rather, the marital unit owns 100% of the property.