When people get married, they often join their lives in many ways, including their finances and property. One way that married couples can share ownership of a home is through a structure known as tenancy by entirety.

This arrangement provides several built-in protections for couples who buy property together, making it a popular choice in about half of the U.S. states. In this article, we'll take a closer look at what tenancy by entirety means and explore the pros and cons of buying a house this way. So, if you're considering purchasing property with your spouse, here's what you need to know about tenancy by entirety.

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What Is Tenancy by the Entirety?

Tenancy by entirety (TBE) is a unique way for married couples to own property. Unlike traditional joint ownership, where both parties have a 50/50 stake, tenancy by entirety (TBE) means that both spouses own the entire property together, with equal survivorship rights. This arrangement ensures the property is kept out of probate, saving the surviving spouse time and money.

It's important to note that tenancy by entirety is only available to married couples and not to other types of relationships, such as relatives or business partners. Currently, 25 U.S. states and Washington, D.C. allow tenancy by entirety.

Under tenancy by entirety, the married couple becomes a single legal entity and must both agree on any decisions related to the property, including selling or developing it. Additionally, each spouse has the right of survivorship, which means that if one spouse passes away, the other automatically gains full ownership of the property. This feature can be beneficial for estate planning purposes and help ensure that the surviving spouse is provided for after the death of their partner.

States That Allow Tenancy by the Entirety

Tenancy by entirety is governed by state law, with each state having its own regulations on how it can be applied. While some states permit this form of ownership for all types of property married couples hold, others only allow it for jointly-owned real estate. Additionally, some states also extend this option to domestic partners who wish to jointly own property through tenancy by entirety.

Twenty-five states and Washington D.C. allow tenancy by the entirety. The states that permit it are:

New Jersey
New York
North Carolina
Rhode Island

How Does Tenancy By Entirety Work?

Under tenancy by entirety, each spouse has full ownership of the property, meaning neither spouse can sell their share or place a lien against the property without mutual consent. This feature also protects the property from creditors if only one spouse is sued for unpaid debt.

When one spouse passes away, the surviving spouse automatically becomes the sole owner of the property, bypassing probate and any heirs of the deceased spouse. However, it's important to note that this only applies when the first spouse dies. If both spouses pass away simultaneously, the property will still go through probate.

Tenancy by entirety is only available to married couples when they receive the title to the property. This legal agreement does not apply to other partnerships, such as friends, siblings, parent-child relationships, or business associates.

Spouses who jointly own property are referred to as tenants by entirety, with each spouse having equal rights to ownership of the property. This arrangement also means that both spouses must agree on any decisions related to the property, including selling or developing it. This requirement ensures that both spouses have a say in how the property is used and protected.

Rights of Tenants by Entirety

In a tenants by entirety arrangement, both parties have several rights, including:

  • Equal ownership: Both individuals are listed on the property deed and have equal rights to ownership of the property, allowing them to live in and use the property.
  • Equal interest in the property: Neither spouse can sell, gift, or transfer their interest in the property without permission from the other.
  • Right of survivorship: Allows a surviving spouse to inherit property automatically when the other spouse dies.
  • Protection from creditors: If one spouse is sued for unpaid debt, the creditor can’t force a sale of the property to satisfy the unpaid debt.

Requirements For Tenants by Entirety (TBE) ownership:

  • Unity of time: The couple must take ownership of the property simultaneously.
  • Unity of marriage: The couple must be legally married. In some states, they can also be domestic partners.
  • Unity of title: The couple must get the title by the same deed.
  • Unity of interest: The couple must have equal interest in the property.
  • Unity of possession: The couple must have equal control and ownership of the property.


Pros And Cons Of Tenancy By Entirety

Like any form of ownership, tenancy by entirety has its own set of benefits and drawbacks to consider. Here are some key factors to keep in mind.

Pros Of Tenancy By Entirety:

Tenancy by entirety offers a range of benefits, including limited asset protection, as creditors can’t use the property as collateral to satisfy a debt. It also prevents one spouse from selling their ownership to a third party or putting a lien on the home without the other's consent.

Additionally, it provides the right of survivorship, meaning that if one spouse passes away, the other automatically becomes the home's sole owner without the probate process. This arrangement (TBE) also protects the estate, as heirs of the deceased spouse cannot make claims against the property.

Cons Of Tenancy By Entirety:

Tenancy by entirety has some disadvantages that should be considered before choosing it. Firstly, since both spouses have equal ownership, they must agree on all property decisions, which can cause relationship issues. Secondly, while protection from creditors is an advantage, it only applies if the debt is from one spouse. If the married couple shares the debt, the protection no longer applies, and if one spouse dies, the surviving spouse is no longer protected from creditors since they become the sole owner of the property. Additionally, tenancy by entirety is only available in 25 states and Washington, D.C., and is typically limited to real estate or homestead properties for married couples or domestic partners. Also, since each spouse has an equal stake in the property, they must agree to any decisions made about the home. Finally, after the surviving spouse dies, the property will go through probate.

Can Tenancy By Entirety Be Terminated?

  • Tenancy by entirety (TBE) can only be terminated with the consent or death of the other spouse.
  • TBE can be terminated by death, divorce, or mutual agreement.
  • If one spouse dies, the surviving spouse becomes the sole owner of the property automatically, without the need for probate, and TBE is terminated.
  • In case of divorce, TBE dissolves as the condition of marriage is no longer met, and the divorce terms will determine what happens to the property.
  • Mutual agreement between both spouses is required to terminate TBE.
  • The arrangement can also be terminated if the couple agrees to sell the property and change the title.
  • The right of ownership bypasses any heirs of the deceased spouse, but when the surviving spouse dies or both spouses die together, the property will go through probate.

Comparing Tenancy by Entirety with Joint Tenancy and Tenants in Common

Tenancy by entirety is often compared with joint tenancy and tenants in common to understand the differences among these types of ownership.

Tenancy By Entirety Vs. Joint Tenancy

  • Tenancy by entirety requires that the individuals holding it be married or in a domestic partnership. On the other hand, joint tenancy can be held by two or more people who may or may not be related.
  • In tenancy by entirety, both spouses have an equal and full 100% interest in the property, while in joint tenancy, all parties have an equal interest, but it may not be 100%. For instance, two people who share joint tenancy would have a 50% interest in the property.
  • With tenancy by entirety, the couple is treated as one entity, while in joint tenancy, joint tenants are seen as separate legal entities. As separate entities, joint tenants don't get the same creditor protection as married couples in a TBE.
  • Both tenancy by entirety and joint tenancy provides the right of survivorship. If one owner passes away, the surviving owner automatically becomes the property owner without the need for probate.

Tenancy By Entirety Vs. Tenants In Common

  • Tenancy in common doesn't offer survivorship rights, unlike TBE. If one owner of a tenancy in common arrangement dies, their ownership share passes on to their heirs rather than the other owners.
  • In case of divorce, a TBE arrangement usually converts into a tenancy in common agreement, and the divorce settlement determines what happens to the property.

Final Thoughts About Tenancy By Entirety

Suppose you want to fully own a property with your spouse or domestic partner while maintaining survivorship rights and protection from creditors. In that case, a TBE may be a good option for you, provided that your state recognizes it and you meet the requirements. Consult a real estate attorney to understand the state’s stipulations and rules. Remember, tenancy by entirety is a legal arrangement where a married couple shares equal ownership of a property, and ownership automatically passes to the survivor if their partner dies. This allows the survivor to avoid probate and protects the home from claims against the other tenant. However, this form of co-ownership is only available in some states.

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