What Is Tenancy by the Entirety?

The term tenancy by the entirety refers to a form of shared property ownership that is reserved only for married couples. A tenancy by the entirety essentially permits spouses to jointly own property as a single legal entity. This means that each spouse has an equal and undivided interest in the property. This form of legal ownership creates a right of survivorship so if one spouse dies, the surviving spouse automatically receives the full title of the property.

How Tenancy by the Entirety Works

Tenancy by the entirety can only occur when the property owners are married to one another at the time that they receive the title. This type of legal agreement doesn't apply to other partnerships such as friends, siblings, parent-child relationships, or business associates. Spouses who mutually own property through tenancy by the entirety are referred to as tenants by entirety. Each spouse legally has equal rights to ownership of the property in question. This allows them to inhabit and use the property as they see fit.

States that allow tenancy by the entirety include Alaska, Arkansas, Delaware, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and Wyoming. Each state has its own laws that govern this form of property ownership and how it may be applied. About half of all states allow this form of ownership to exist for all types of property held by married couples. Some states only allow tenancy by the entirety to be exercised for real estate that is jointly owned by married couples.

The condition of mutual ownership of the entire property means the spouses must be in agreement when making decisions about the property. This means that one spouse doesn't have the legal right to sell off or develop part of or the property without the other’s consent. There is no subdivision that separates the property into equal parts between the spouses. If one spouse writes a will that grants an interest stake in the property to an heir, the power and rights of tenancy by the entirety invalidates and supersedes that aspect of the will. 

Since a tenancy by the entirety creates a right of survivorship, a deceased spouse's heirs cannot inherit their share of the property even if it's specified in their will.

A tenancy by the entirety may be terminated in one of several ways:

  • The death of one spouse: As mentioned above, a tenancy by the entirety creates a right of survivorship which means when one spouse dies, that person's share in the property is automatically transferred to the surviving spouse. This eliminates the need for probate.
  • The mutual agreement of each spouse
  • Divorce: When the couple splits legally, the parties become tenants in common (TIC), where both have ownership rights in the property. Courts may order the sale of the property with the proceeds split between the divorcing couple or they may award full ownership to one party.

Key Takeaways

  • Tenancy by the entirety is a form of property ownership reserved only for married couples.
  • Each spouse has a legal right to an equal portion of the property provided they were married at the time title was received in both their names.
  • This arrangement creates a right of survivorship, so when one spouse dies, their interest in the property is automatically transferred to the surviving spouse.
  • Creditors cannot enforce a lien on any property that falls under a tenancy by the entirety if only one spouse owns the debt.

Special Considerations

There are two predominant aspects of tenancy by the entirety that characterize its use in legal action. The married couple shares mutual control and makes use of the entire property. The property also can only be attached by creditors to whom the married couple owes joint debts.

Creditors who seek relief on delinquent debt cannot enter claims against any property that is under tenancy by the entirety unless the couple shares that debt. For example, if a borrower owes payments on a motorcycle they acquired only for themselves, the lender could not put a lien against a house the borrower owns with a spouse because the property is under tenancy by the entirety.