Avoiding Probate With Tenancy by the Entirety Ownership

Many couples choose to hold title to their valuable property as "tenants by the entirety." Tenancy by the entirety (TBE) is very much like joint tenancy, but it's just for married couples (and in a few states, same-sex partners who have registered with the state). When it comes to avoiding probate, TBE has almost the same advantages and disadvantages of joint tenancy and is most useful in the same situation: when a couple acquires property together.

States With Tenancy by the Entirety Ownership

* For real estate only
** For homestead property only
† Joint tenancy of husband and wife is automatically a tenancy by the entirety
‡ Only if created before April 4, 1985

Tenancy by the Entirety

There are a few important differences, however, between joint tenancy and tenancy by the entirety. For one, if property is held in tenancy by the entirety, neither spouse can transfer his or her half of the property alone, either while alive or by will or trust. It must go to the surviving spouse. This is different from joint tenancy; a joint tenant is free to break the joint tenancy at any time.

EXAMPLE: Fred and Ethel hold title to their house in tenancy by the entirety. If Fred wanted to sell or give away his half-interest in the house, he could not do so without Ethel's signature on the deed.

Other differences may also be important to you. In general, tenancy by the entirety property is better protected than joint tenancy property from creditors of just one spouse. If someone sues one spouse and wins a court judgment, in most states the creditor can't seize and sell tenancy by the entirety property to pay off the debt. And if one spouse files for bankruptcy, creditors generally can't reach or sever property held in tenancy by the entirety.