What Is Tenancy by Entirety?

Tenancy by entirety (TBE) is a way married couples can title a property so that each spouse owns 100% of the property rather than just 50% of the property. When one spouse dies, the surviving spouse automatically owns the property. Also, TBE may offer some protection against creditors.

When you own a home or other real estate, how it is titled determines your rights to that property. Tenancy by entirety is an option exclusively available to married couples, providing equal rights for each spouse.

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There are numerous ways that you can title your primary residence, vacation properties and other real estate. A few options include:

• Tenancy by entirety (TBE).

• Joint tenants with rights of survivorship (JTWROS).

• Tenancy in common (TIC).

• Joint tenancy with full right of survivorship^[0]

  American College of Trust and Estate Counsel. Common Ways to Title Your Home. Accessed Nov 28, 2023.

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Although any two or more people can use most title options, tenancy by the entirety is exclusively available to married spouses.

• A key feature of this method is that the surviving spouse becomes the full owner when the other spouse dies. 

• Additionally, the TBE title terminates if the couple divorces or someone else buys the property^[0]

  Social Security Administration. Program Operations Manual System (POMS), SI ATL01110.510 Shared Ownership. Accessed Nov 28, 2023.

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• Married couples use tenancy by entirety to simplify their estate plans. It keeps property out of probate because it automatically transfers to the surviving spouse. 

• Tenancy by entirety is not recognized in every U.S. state. In states where TBE isn't available, community property is the prevailing law on marital assets.

Both spouses own the real estate together with an undivided interest. This means both spouses own 100% of the property.

• With this title method, they each have full rights to use and live in the home. 

• However, neither spouse can transfer their interest in the property without the other spouse's permission^[0]

  Cornell University Legal Information Institute. Tenancy by the entirety. Accessed Nov 28, 2023.

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In many jurisdictions, creditors cannot attach liens against property held in TBE to satisfy the debts of only one spouse.

• The rationale behind this law is that if neither spouse has an individual interest in the property, creditors cannot attach an obligation to it^[0]

  IRS.gov. Notice 2003-60. Accessed Nov 28, 2023.

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• In states that recognize TBE, it is also useful to protect property when one spouse separately owes money to creditors.

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The main difference between tenancy by entirety and joint tenancy with right of survivorship is the marital status of the owners. Tenancy by entirety is only for married couples; JTWROS can be used by two or more people who are not married. Both title options convey ownership automatically to the surviving owner^[0]

For example, you may own property under JTWROS with siblings, other family members, friends or business partners. Under JTWROS, ownership of the property is split equally among the owners. Two owners would each have 50% ownership; five owners would each have 20%. With TBE, both spouses have an undivided 100% ownership of the property.

Unlike TBE, JTWROS does not offer protection from creditors. If one of the owners gets sued, a creditor can force a sale of the property. When this happens, the creditor gets compensated by the debtor's share of the sale. The remaining proceeds are distributed equally among the other owners.

Owners under JTWROS can sell or transfer their ownership to anyone they choose. Tenancy by entirety, on the other hand, does not allow either spouse to sell or transfer their interest and have the property remain under TBE.

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Pros

• Avoids probate. The surviving spouse automatically gains full control of the property when the other spouse dies.

• Protection against creditors. In certain states, creditors cannot attach debts to the home when only one spouse owes the creditor.

• Cannot sell without notice. Neither spouse can sell their share in the property without the other's consent.

Cons

• Protection changes when a spouse dies. When one spouse dies, the tenancy by entirety converts to full ownership, and protection from creditors for the surviving spouse goes away.

• Creditor protection is not available in all states. Protection from creditors is only available in "full bar jurisdictions."

• Estate planning issues. TBE causes estate planning issues if spouses want to direct their share of the property to other beneficiaries. Additionally, if both spouses die, it doesn't provide instructions on how to distribute the asset. For example, spouses who have children from previous relationships often want to pass their ownership of a home to their children instead of to the surviving spouse. This is not possible through tenancy by entirety because of its right of survivorship clause.

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If you're interested in titling your property with tenancy by entirety, follow these steps.

1. Get married. This title option is only available to married spouses.

2. Obtain a copy of the current title. Having a copy of the current title of your home ensures that all of the requisite signers are available. In some cases, only one spouse is on the current title or other people may also be on the title.

3. Prepare a quitclaim deed. A quitclaim deed allows the current owners to transfer a property title to new owners or to change the title among existing owners.

4. Use the tenancy by entirety language. When preparing your quitclaim deed, use the TBE language in the new title to share ownership between spouses.

5. Have the documents notarized. A notary verifies the identity of the people signing a quitclaim deed. Notarized documents are typically required for real estate transactions.

6. File the quitclaim deed. Take your notarized quitclaim deed to your local county recorder's office. There may be a small fee to file the papers. The recorder's office will update its records to represent the new title on the property.

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