Tenancy by the Entirety

Definition

Tenancy by the Entirety is an estate in property (real or personal) where ownership is exclusively between two married individuals. Both parties have equal rights to possess and enjoy the property during their joint lives, and this form of ownership carries the right of survivorship. Upon the death of one spouse, ownership of the property automatically transfers to the surviving spouse. This type of tenancy is recognized in some states and offers specific legal protections against creditors’ claims.

Examples

Property Purchase: Suppose John and Mary, a married couple, buy a house as tenants by the entirety. Both have equal rights to live in and manage the house. If John passes away, Mary automatically becomes the sole owner of the house without the need for probate.
Credit Protection: Jane and Tom own a beach condo as tenants by the entirety. If Tom incurs significant personal debts, creditors cannot force the sale of the condo to satisfy Tom’s debts because ownership is protected in tenancy by the entirety.
Divorce Implications: Sarah and Mike own a piece of land as tenants by the entirety. Upon getting divorced, their tenancy by the entirety automatically converts into a tenancy in common, meaning both now hold an individual interest in the property that they can manage and sell independently.

Frequently Asked Questions (FAQs)

What happens to a tenancy by the entirety if one spouse dies?

Answer: The property automatically transfers to the surviving spouse due to the right of survivorship, bypassing probate.

Can one spouse unilaterally sell or transfer their interest in a tenancy by the entirety?

Answer: No, neither spouse can sell or transfer their interest in the property without the consent of the other.

How do tenancy by the entirety protections apply to creditors?

Answer: Creditors of just one spouse generally cannot attach or force the sale of property held in tenancy by the entirety to satisfy individual debts.

Does tenancy by the entirety apply to all types of property?

Answer: It typically applies to real property (real estate), but some states also allow it for personal property like bank accounts.

What happens to tenancy by the entirety upon divorce?

Answer: The tenancy by the entirety is converted into a tenancy in common, where each former spouse holds an independent interest in the property.

Tenancy in Common: A form of co-ownership where each owner holds an individual, undivided interest in the property. There is no right of survivorship; upon death, the deceased’s interest passes according to their will or state inheritance laws.
Joint Tenancy: A form of co-ownership where co-owners have equal ownership shares and rights of survivorship. If a co-owner dies, their share is distributed to the surviving joint tenants.
Community Property: A system of property ownership for married couples where all assets acquired during marriage are considered jointly owned. This is recognized in certain states.

Online Resources

References

“Black’s Law Dictionary,” 11th Edition by Bryan A. Garner.
Department of Real Estate, Various State Government Publications
“Real Estate Principles,” by Charles J. Jacobus.

Suggested Books for Further Studies

“Principles of Real Estate Practice” by Stephen Mettling and David Cusic
“Real Estate Law” by Marianne M. Jennings
“Modern Real Estate Practice” by Fillmore W. Galaty, Wellington J. Allaway, and Robert C. Kyle

Tenancy Basics: Tenancy by the Entirety Fundamentals Quiz

### What is Tenancy by the Entirety? - [x] A form of joint property ownership exclusive to married couples with the right of survivorship. - [ ] An agreement allowing tenants to live in a property rent-free. - [ ] A type of holding where one tenant owns the property outright. - [ ] A temporary leasing arrangement for residential properties. > **Explanation:** Tenancy by the Entirety is a form of joint property ownership exclusive to married couples, providing equal rights and survivorship. ### What unique feature distinguishes Tenancy by the Entirety? - [ ] It applies only to commercial properties. - [ ] It involves a financial institution as a co-owner. - [x] It includes the right of survivorship. - [ ] It is dependent on having children. > **Explanation:** Tenancy by the Entirety includes the right of survivorship, meaning when one spouse dies, the remaining spouse automatically inherits the full property. ### Can an individual creditor of one spouse claim property held in Tenancy by the Entirety? - [x] No - [ ] Yes - [ ] Only with the court's permission - [ ] Only if the property value exceeds a certain amount > **Explanation:** Generally, property held in Tenancy by the Entirety is protected from creditors of just one spouse and thus cannot be claimed. ### Upon divorce, what does a Tenancy by the Entirety convert into? - [ ] Sole ownership for the spouse who initiated the divorce - [ ] A joint tenancy - [x] A tenancy in common - [ ] An estate at will > **Explanation:** Upon divorce, a Tenancy by the Entirety is converted into a tenancy in common. ### Why might a married couple choose to own property as tenants by the entirety? - [ ] To evade building codes - [ ] For temporary ownership purposes - [x] For protections against individual creditors and automatic survivorship rights - [ ] To allow both spouses to use different currency > **Explanation:** Couples may choose Tenancy by the Entirety for the legal protections it offers against individual creditors and the automatic transfer of ownership upon the death of a spouse. ### Is the right of survivorship available in a Tenancy in Common? - [ ] Yes - [x] No - [ ] Only under specific legal conditions - [ ] Only if specified in a will > **Explanation:** The right of survivorship is not available in a Tenancy in Common; this feature is specific to joint tenancy and tenancy by the entirety. ### Which statement is true regarding property transfer in a Tenancy by the Entirety? - [ ] Either spouse can transfer their interest unilaterally. - [ ] Neither spouse has any ownership rights. - [x] Both spouses must agree to transfer any interest. - [ ] Only the surviving spouse has legal ownership. > **Explanation:** In Tenancy by the Entirety, both spouses must agree to any transfer of property interest. ### What typically happens if one spouse dies and the property is held as Tenancy by the Entirety? - [ ] The property is sold and proceeds divided. - [ ] Government claims the property. - [ ] The property reverts to a third-party trustee. - [x] The surviving spouse becomes the sole owner. > **Explanation:** If one spouse dies, the surviving spouse automatically becomes the sole owner of the property. ### Can Tenancy by the Entirety be used for properties bought by unmarried partners? - [ ] Yes - [ ] Only for commercial properties - [x] No - [ ] Only if there is a legal agreement > **Explanation:** Tenancy by the Entirety is specific to married couples and cannot be used by unmarried partners. ### In which cases might Tenancy by the Entirety not be recognized? - [x] In states where it is not legally recognized. - [ ] For properties under 500 square feet. - [ ] For short-term leases. - [ ] For properties located outside city limits. > **Explanation:** Tenancy by the Entirety might not be recognized in states where the law does not provide for this type of ownership.