Tenancy by Entirety (TBE) is a type of property ownership that is recognized in 25 states across the U.S. Essentially, tenancy by the entirety, or tenancy by entirety, allows married couples to own property as a single undivided legal entity. However, the laws surrounding TBE can be complex and vary from state to state. This guide provides a complete look at how TBEs work, including the benefits and drawbacks of this type of ownership.
Tenancy by entirety most commonly refers to real estate assets, but in some states, it can apply to personal property as well. In states that allow TBE status for personal property, it can apply to various types of personal property, including assets such as bank accounts, stocks and securities, vacation homes, and other types of property.
What Is Tenancy by Entirety?
Tenancy by Entirety (TBE) is a type of property ownership only available to married couples. Under TBE, both spouses own the entire property together rather than owning separate shares. This means that if one spouse died, the surviving spouse would automatically inherit the entire property.
TBE provides specific legal protections, such as shielding the property from the creditors of one spouse. Each spouse has an undivided and equal interest in the property. TBE creates a right of survivorship that gives full title to the property to the surviving spouse.
How Does TBE Work?
TBE is a form of joint ownership between married couples or domestic partners who later become legally married, where each spouse has an equal right to use and enjoy the property. Likewise, both spouses or partners are responsible for any debts and responsibilities associated with the property.
While a TBE provides certain legal protections for the property, it also removes the ability of one spouse to sell or transfer their share of the property without the other spouse’s consent.
What makes TBE unique is that it is only available to married couples or domestic partners who acquire the property and later become married. Under TBE, both spouses own the entire property together rather than owning a specific percentage or share.
What if the couple gets divorced?
In the event of a divorce, the protections afforded by a TBE dissolve. Once the marriage is legally dissolved, the couple then becomes “tenants in common,” which does not afford the same protections. Additionally, TBE is not recognized in 25 states, so it is essential that you understand whether TBE is a legal and viable option in your state.
What if a spouse dies?
In the case of the death of one of the spouses, TBE can be a useful tool for estate planning, as it provides certain tax benefits and simplifies the transfer of property when one spouse dies.
The primary benefit for estate planning purposes is that if one spouse passes away, the other automatically becomes the sole owner of the property without the need for a formal right of survivorship. No subdivision of the property exists between the spouses, so even if one party leaves a will granting an interest in the property to an heir, the TBE supersedes said will.
A TBE protects property from the debts of one spouse; however, it does not offer protection from claims arising from shared debts. Further, the property will have to pass through probate after the death of the remaining spouse.
To fully understand the pros and cons of a TBE, all parties should consult with a legal professional.
The Elements of Tenancy by Entirety (Requirements)
The elements of tenancy by entirety can vary slightly among different states. For example, some states allow TBE for property acquired prior to marriage, while other states only allow TBE for property acquired during the marriage.
Below are some of the common requirements in TBE ownership.
- The couple must assume ownership of the property at the same time in most states.
- The deed to the property must give a title to both partners.
- The couple must be legally married. In some states, domestic partners who purchase a property together a later become legally married can be granted TBE status.
- The couple must have an equal interest in the property.
- The couple must establish equal control and ownership of the property.
Since ownership is a requirement for tenancy by entirety, it does not apply to residential lease agreement for married couples. However, if the property you are renting is bound by tenancy by entirety, there may be a clause in your residential lease agreement outlining what may happen if the tenancy by entirety is dissolved.
With each spouse legally having equal ownership rights to the property, it allows them to use and inhabit the property as they see fit. Mutual ownership of the entire property means that making decisions about the property requires both spouses to be in agreement. This means that one spouse would not have the right to sell or develop any part of the property without the consent of the other partner.
Tenancy by Entirety Laws by State
Below we will list the 25 states that allow some form of Tenancy by Entirety as well as whether the laws include real property, personal property or both.
| State
(Law) |
Real Property | Personal Property |
|---|---|---|
| Alaska | Yes | No |
| Arkansas | Yes | Yes |
| Delaware | Yes | Yes |
| District of Columbia | Yes | Yes |
| Florida | Yes | Yes |
| Hawaii | Yes | Yes |
| Illinois | Yes | No |
| Indiana | Yes | No |
| Kentucky | Yes | No |
| Maryland | Yes | Yes |
| Massachusetts | Yes | Yes |
| Michigan | Yes | No |
| Mississippi | Yes | Yes |
| Missouri | Yes | Yes |
| New Jersey | Yes | Yes |
| New York | Yes | No |
| North Carolina | Yes | No |
| Oklahoma | Yes | Yes |
| Oregon | Yes | No |
| Pennsylvania | Yes | Yes |
| Rhode Island | Yes | Yes |
| Tennessee | Yes | Yes |
| Vermont | Yes | Yes |
| Virginia | Yes | Yes |
| Wyoming | Yes | Yes |
How to Terminate a TBE
Essentially, there are only two ways to terminate a TBE: with the mutual consent of both spouses, or it is terminated with the death of one party. If one spouse dies, the TBE becomes the sole property of the surviving spouse, effectively ending the tenancy by entirety.
Your attorney can help you decide which type of property ownership offers the greatest benefit for your particular situation. Find out more about transferring the ownership of property or an estate planning checklist to help decide the best course of action.
Helpful Resources:
Tenancy by Entirety (TBE) is a type of property ownership that is recognized in 25 states across the U.S. Essentially, tenancy by the entirety, or tenancy by entirety, allows married couples to own property as a single undivided legal entity. However, the laws surrounding TBE can be complex and vary from state to state. This guide provides a complete look at how TBEs work, including the benefits and drawbacks of this type of ownership.
Tenancy by entirety most commonly refers to real estate assets, but in some states, it can apply to personal property as well. In states that allow TBE status for personal property, it can apply to various types of personal property, including assets such as bank accounts, stocks and securities, vacation homes, and other types of property.
What Is Tenancy by Entirety?
Tenancy by Entirety (TBE) is a type of property ownership only available to married couples. Under TBE, both spouses own the entire property together rather than owning separate shares. This means that if one spouse died, the surviving spouse would automatically inherit the entire property.
TBE provides specific legal protections, such as shielding the property from the creditors of one spouse. Each spouse has an undivided and equal interest in the property. TBE creates a right of survivorship that gives full title to the property to the surviving spouse.
How Does TBE Work?
TBE is a form of joint ownership between married couples or domestic partners who later become legally married, where each spouse has an equal right to use and enjoy the property. Likewise, both spouses or partners are responsible for any debts and responsibilities associated with the property.
While a TBE provides certain legal protections for the property, it also removes the ability of one spouse to sell or transfer their share of the property without the other spouse’s consent.
What makes TBE unique is that it is only available to married couples or domestic partners who acquire the property and later become married. Under TBE, both spouses own the entire property together rather than owning a specific percentage or share.
What if the couple gets divorced?
In the event of a divorce, the protections afforded by a TBE dissolve. Once the marriage is legally dissolved, the couple then becomes “tenants in common,” which does not afford the same protections. Additionally, TBE is not recognized in 25 states, so it is essential that you understand whether TBE is a legal and viable option in your state.
What if a spouse dies?
In the case of the death of one of the spouses, TBE can be a useful tool for estate planning, as it provides certain tax benefits and simplifies the transfer of property when one spouse dies.
The primary benefit for estate planning purposes is that if one spouse passes away, the other automatically becomes the sole owner of the property without the need for a formal right of survivorship. No subdivision of the property exists between the spouses, so even if one party leaves a will granting an interest in the property to an heir, the TBE supersedes said will.
A TBE protects property from the debts of one spouse; however, it does not offer protection from claims arising from shared debts. Further, the property will have to pass through probate after the death of the remaining spouse.
To fully understand the pros and cons of a TBE, all parties should consult with a legal professional.
The Elements of Tenancy by Entirety (Requirements)
The elements of tenancy by entirety can vary slightly among different states. For example, some states allow TBE for property acquired prior to marriage, while other states only allow TBE for property acquired during the marriage.
Below are some of the common requirements in TBE ownership.
- The couple must assume ownership of the property at the same time in most states.
- The deed to the property must give a title to both partners.
- The couple must be legally married. In some states, domestic partners who purchase a property together a later become legally married can be granted TBE status.
- The couple must have an equal interest in the property.
- The couple must establish equal control and ownership of the property.
Since ownership is a requirement for tenancy by entirety, it does not apply to residential lease agreement for married couples. However, if the property you are renting is bound by tenancy by entirety, there may be a clause in your residential lease agreement outlining what may happen if the tenancy by entirety is dissolved.
With each spouse legally having equal ownership rights to the property, it allows them to use and inhabit the property as they see fit. Mutual ownership of the entire property means that making decisions about the property requires both spouses to be in agreement. This means that one spouse would not have the right to sell or develop any part of the property without the consent of the other partner.
Tenancy by Entirety Laws by State
Below we will list the 25 states that allow some form of Tenancy by Entirety as well as whether the laws include real property, personal property or both.
| State
(Law) |
Real Property | Personal Property |
|---|---|---|
| Alaska | Yes | No |
| Arkansas | Yes | Yes |
| Delaware | Yes | Yes |
| District of Columbia | Yes | Yes |
| Florida | Yes | Yes |
| Hawaii | Yes | Yes |
| Illinois | Yes | No |
| Indiana | Yes | No |
| Kentucky | Yes | No |
| Maryland | Yes | Yes |
| Massachusetts | Yes | Yes |
| Michigan | Yes | No |
| Mississippi | Yes | Yes |
| Missouri | Yes | Yes |
| New Jersey | Yes | Yes |
| New York | Yes | No |
| North Carolina | Yes | No |
| Oklahoma | Yes | Yes |
| Oregon | Yes | No |
| Pennsylvania | Yes | Yes |
| Rhode Island | Yes | Yes |
| Tennessee | Yes | Yes |
| Vermont | Yes | Yes |
| Virginia | Yes | Yes |
| Wyoming | Yes | Yes |
How to Terminate a TBE
Essentially, there are only two ways to terminate a TBE: with the mutual consent of both spouses, or it is terminated with the death of one party. If one spouse dies, the TBE becomes the sole property of the surviving spouse, effectively ending the tenancy by entirety.
Your attorney can help you decide which type of property ownership offers the greatest benefit for your particular situation. Find out more about transferring the ownership of property or an estate planning checklist to help decide the best course of action.
Helpful Resources:
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