Comparing Tenants by the Entirety with Joint Tenants with Right of Survivorship

It may seem simple to determine who “owns” real estate. After all, the state maintains property records that are open to the public, and the owner’s name typically appears in those records. However, there are different types of property ownership. Each type has its advantages and disadvantages. For example, tenants by entirety vs joint tenants are both types of joint property ownership. When comparing tenants by the entirety with joint tenants with right of survivorship, you will note some significant differences in how each affects the property and the owners.

Is there a difference in who can own property by either of these methods?

Yes. In a ‘joint tenants with right of survivorship’ situation, any two individuals can own the property. However, only married couples may own property in a ‘tenants by the entirety’ arrangement.

What rights do the owners have over their property interest?

Tenancy by the entirety requires that both spouses participate in dealing with the property.

Interest in property owned as joint tenants with right of survivorship can be conveyed or transferred by one of the owners. However, joint owners cannot pass their share of the property to heirs through a Will or trust.

If an owner dies, what happens to the property?

For both types of joint ownership being discussed in this article, the property interest passes to the surviving owner.

Does tenants by the entirety property ownership offer the same protection as joint tenants from creditors?

No!  This is a very significant difference between the two forms of property ownership.  With tenants by the entirety, if either owner is sued, the property is exempt from the claims of that creditor.  However, with joint tenants with right of survivorship, if EITHER owner is sued, the property is vulnerable to a potential claim or judgment.  As you can see, for married couples, it generally makes a lot of sense to own assets as tenants by the entirety rather than as joint tenants with right of survivorship.

Tenants by The Entirety Might Be The Best Choice But…

Choosing to own property as tenants by the entirety or joint tenants with right of survivorship – or perhaps sole ownership – makes a difference. Your choice may also affect your estate planning.

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Written by: John Mangan, JD, MBA