Understanding Tenancy by the Entirety

Tenancy by the entirety is one way to vest a deed. It designates shared ownership of property. In the states that allow it, a tenancy by the entirety is a protective way for married couples to co-own a home. So, if you’re acquiring a deed as spouses or legal life partners, holding property as tenants by the entirety could be something you opt to do.

Unmarried couples often hold property as joint tenants with rights of survivorship (JTWROS). In the states that recognize this vesting type, they could change this vesting to a tenancy by the entirety after marriage.

Especially where one spouse has a high debt load or could be subject to liability judgments, the change could be well worth making.

How Does Tenancy by the Entirety Work?

As the name suggests, each spouse owns the entire property. Twenty-five states, plus Washington DC, recognize a form of tenancy by the entirety.

As with joint tenants with rights of survivorship, each of the tenants by the entirety has an automatic right of ownership of the home after one owner dies. So, the survivor will own the entire property—and is thus in the same legal position as before the death occurred.  

Though a joint tenancy and a tenancy by the entirety share key elements, a tenancy by the entirety offers additional protections to each spouse from liability for the actions of the other. More on this below.

Tenancy by the entirety can make good sense for married couples who:

• Prefer to keep the home out of probate court.

• Want to shield the property value from either individual’s debts.

• Want to co-own for the long run.

For a tenancy by the entirety, the co-owners must be married. This is a distinction from joint tenancy, which can be used by any number of co-owners—married or not, related or not.  

For a tenancy by the entirety, the marriage partners take ownership together by the same inheritance or deed. Both spouses have an equal right to ownership. Both spouses must agree if they wish to transfer their property to another owner. In contrast, in a joint tenancy, a particular co-owner may convey their ownership share without the agreement of the other. If this occurs, the ownership changes to a tenancy in common with the remaining co-owner and the new owner.

Tenants by the entirety may decide together to end their vesting, changing it into a tenancy in common. If the pair decides to get a divorce, they will, by law, end their tenancy by the entirety. This is because only marriage partners get to enjoy this form of vesting.  

Joint tenancy is a better fit for co-owners who aren’t married but want to automatically pass their ownership stake to the other—not to other beneficiaries—when either one passes away.

How Does a Tenancy by the Entirety Shield Each Spouse From Liability for the Actions of the Other?

Titling a home as a tenancy by the entirety offers an important advantage to co-owning spouses. It can spare a debtor’s spouse from losing the home in order to resolve the debts. Same goes for court judgments. One spouse won’t lose the home over the other’s legal liability.

By default in joint ownership, if just one of the owners faces a court judgment or builds up debt, a claim can attach to the home’s value. But in a tenancy by the entirety, the co-owned home is shielded. Only if both spouses took on the debt or face the judgment together can claims or judgments be enforced.

So, holding the home as tenants by the entirety is a way to protect the co-owned property value from claims against only one of the spouses. Jointly held assets are normally off-limits to the creditor of just one spouse.

Discuss your situation with a lawyer who’s licensed in your state to examine any applicable exceptions.

Can Same-Sex Couples Vest a Deed as Tenants by the Entirety?

Many do. In some states, when same-sex marriage was legalized, couples who were formerly tenants in common or joint tenants with the right of survivorship took legal steps to vest their homes as tenants by the entirety, re-deed the property to create the new vesting form.

Their new deeds would name the co-owners, and say that they are spouses holding the deed as tenants by the entirety. The deed would be notarized as required under the law of the state. It would then be recorded, ensuring public notice of their newly vested rights.

Not only do they enjoy certain debt and liability protections now; they also have certain restrictions. They can’t act independently with regard to their ownership. Tenancy by the entirety means the spouses must agree if they make legal changes to the deed.  

When one passes away, the other co-owner will acquire the title to the entire property. No probate will be necessary if the home is properly deeded into a tenancy by the entirety.

How Does Tenancy by the Entirety Differ From Community Property?

In a community property state, a deed signed and acquired by marriage partners belongs to both spouses. Each spouse gets an equal, transferable share.

So, rights of survivorship do not exist in the standard form of this vesting type. The property has to go into probate, as automatic vesting in the survivor doesn’t happen.

Each of the two co-owners may bequeath their own share to the beneficiary of their choice.

Look out for this feature, because it means that the beneficiary will then co-own with the surviving spouse, in a newly formed tenancy in common.

Now, say the late co-owner did not designate anyone else to receive their share of the property upon death. In that case, the surviving owner now holds their own share, and the additional share which used to belong to the deceased.

There is a third possible scenario as well. Some states allow couples to hold community property with rights of survivorship. Upon the death of either of the co-owning spouses, the home then bypasses probate. The interest of the late co-owner passes straight to the survivor, by law.

Note that a spouse may sign a deed to oneself to end the community property vesting. That would make the pair tenants in common.

Important note to our readers: This Q&A is not legal advice. It is intended to offer you a general idea of this form of vesting a deed. If you are thinking about deeds, prenuptial agreements, or wills and other estate planning instruments, consult a lawyer in your state. Each state has its own legal framework. Should you come into conflicts involving co-owners, creditors, or legal demands, you may need professional legal assistance.

To read further on the matter of marriage and the deed to your home, take a look at our brief overview of marriage and real estate.