Property Titles and Tenants by the Entirety

You can hold title to property in several different ways depending on your goals and personal circumstances. A tenancy by the entirety is one option available to spouses in some states. It's only available to spouses and, in some jurisdictions, to same-sex partners. If you try to enter into such an ownership arrangement with someone to whom you're not married, the deed will "fail" -- it can't be upheld by law.

Tenants by the Entirety: Who Owns What? 

Each spouse individually own the entire property as a tenant by the entirety. Husband and wife are treated as a single legal entity. If Tom and Sue Smith buy property and hold title together as tenants by the entirety, they each have a 100 percent ownership interest in the real estate.

This prevents Tom from selling the property or, in many states, from placing a mortgage against it or using it as collateral without Sue's cooperation and consent. She owns the property, too. Tom's or Sue's creditors can't reach the asset, at least not for debts in just one spouse's name. If Tom is sued for a $50,000 unpaid debt that he contracted for in his sole name, that creditor cannot force the sale of the property or place a lien against it because it is also owned by Sue, who is not a contractual party to the debt. 

Tenants by the Entirety Have Rights of Survivorship  

When one spouse dies, the surviving spouse immediately becomes the sole owner of the property because a tenancy by the entirety carries rights of survivorship.

The property passes outside probate to the surviving spouse instead of to the deceased spouse's heirs-at-law or under the terms of the deceased spouse's estate plan. In fact, he cannot legally include the property in his estate plan.

What States Observe This Form of Tenancy? 

As of 2016, about half of all states -- 26 to be exact -- recognized tenancies by the entirety with varying rules.

  • Alaska, Indiana, Kentucky, New York, North Carolina, Oregon and Rhode Island reserve this type of ownership for real estate only. 
  • States that recognize tenancies by the entirety for all types of property include Arkansas, Delaware, Florida, Hawaii, Maryland, Massachusetts, Mississippi, Missouri, New Jersey, Oklahoma, Pennsylvania, Tennessee, Vermont, Virginia, and Wyoming. The District of Columbia also observes tenancies by the entirety for all property. 
  • On the other end of the spectrum, couples can only hold their homesteads as tenants by the entirety in Illinois. They can't buy and title investment real estate this way. 
  • In Michigan, any joint tenancy entered into by a husband and wife automatically becomes a tenancy by the entirety by virtue of their marriage.
  • Ohio only recognizes this type of ownership for deeds created prior to April 4, 1985.

Tenancies by the entirety aren't typically the default form of ownership when an asset is held by a  married couple unless the property is real estate. This type of ownership can also be used for bank and investment accounts in the states that allow this. 

NOTE: State laws can change frequently. Please consult with an attorney for the most up-to-date advice if you're considering holding title to property this way. The information contained in this article is not legal advice and it is not a substitute for legal advice.

Contrast this to "Joint Tenants With Right of Survivorship" and "Tenants in Common."