Tenants by the Entirety is a form of title that may be used by a husband and wife to own real estate and personal property in some states. Both spouses own the whole, undivided interest in the property with right of survivorship, meaning the other inherits the entire interest upon the death of the first spouse. For an overview of how title to property impacts your estate plan, see Estate Planning Deeds.
In some states, domestic partners or parties to a civil union may hold title as tenants by the entirety. This form of title may only be used by married couples or those in a legally recognized domestic partnership or civil union. For example, a parent and child or siblings may not own property together as tenants by the entirety.
Note: Tenants by the entirety is only available in certain states. Consult a lawyer in the state where the property is located to determine if tenants by the entirety is an option for you. See finding an attorney.
Disadvantages of Tenants by the Entirety
The primary disadvantage of holding title as tenants by the entirety is one spouse or partner cannot sell or transfer his interest in the property without the other's authorization or written consent.
To compare other forms of title, see title to property.
Advantages of Tenants by the Entirety
1. Owning property as tenants by the entirety ensures the surviving spouse or partner will inherit the property after the first spouse or partner dies, without losing it to other heirs.
2. Upon death of one spouse or partner, the property passes to the surviving spouse or partner immediately, without probate. Avoiding probate is a significant advantage.
3. If you are concerned your spouse or partner may try to transfer or sell the property without your consent, tenants by the entirety may offer some protection, since one tenant cannot transfer an interest in the property without the other's consent.
4. In some states that recognize this form of title, tenants by the entirety may offer protection from certain types of creditor claims.
Estate Planning Considerations
If you take title as tenants by the entirety, be aware the surviving spouse or domestic partner owns the entire property after the other is deceased. If you want to leave your interest in the property to your children or other heirs, but your spouse or partner has a different plan for distributing the property, you may not be able to leave your desired beneficiaries an inheritance.
If you and your spouse or partner are in agreement regarding whom should inherit the property after the last surviving tenant passes, consult a lawyer to ensure your estate planning wishes are honored. If you are concerned your spouse or partner will not follow through with leaving the property to your desired beneficiaries, a lawyer can advise on your options.Copyright 2020 Pennyborn.com. ALL RIGHTS RESERVED.
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