Protecting a personal residence—often a person’s largest and most sentimental asset—is a task fraught with complexity. Unlike simple investments, the home’s unique status exposes it to a myriad of risks, from unexpected liabilities and creditors to legal disputes and long-term care costs. Consequently, homeowners face a dizzying array of asset protection strategies, including trusts, corporate structures, and various statutory exemptions. Each option comes with a distinct set of advantages regarding protection, control, and tax implications, but also inherent drawbacks in terms of cost, inflexibility, and legal requirements.
One lesser-known but potentially effective form of joint property ownership is tenancy by the entirety. Available only to married couples in certain states, this legal concept can provide a significant shield against creditors and other legal risks.
In this article, we’ll explore what tenancy by the entirety is, how it compares to other ownership types, which states allow it, and how we can help you leverage it as part of a comprehensive strategy.
What Is Tenancy by the Entirety?
Tenancy by the entirety (TBE) is a unique form of property ownership available to married couples that treats the spouses as a single legal entity. Both individuals are considered to own 100% of the property. This unity provides an additional layer of protection not found in other forms of joint ownership.
It is often used to title real estate, particularly a couple’s primary residence, but in some states, TBE can apply to personal property and even bank accounts.
4 Key Benefits of Tenancy by the Entirety
This unique form of ownership provides several legal and practical advantages for married couples who hold property together:
1. Creditor Protection
If a creditor sues only one spouse, they generally cannot force the sale of property held in TBE.
2. Right of Survivorship
When one spouse dies, the property passes directly to the surviving spouse without going through probate.
3. Simplicity in Estate Planning
TBE eliminates the need for more complex legal mechanisms to transfer ownership upon death.
4. Unity of Ownership
Since neither spouse owns a divisible share, the property is viewed as indivisible without consent from both parties.
Tenancy by the Entirety vs. Other Ownership Types
| Ownership Type | Right of Survivorship | Creditor Protection | Spouse-Only Option |
| Tenants in Common | ❌ | ❌ | ❌ |
| Joint Tenants | ✅ | ❌ | ❌ |
| Tenants by Entirety | ✅ | ✅ | ✅ |
- Tenants in Common: Each owner has a divisible share and can sell or transfer it independently.
- Joint Tenancy: Includes survivorship but lacks creditor protection.
- Tenancy by the Entirety: Combines survivorship and protection from individual creditors, but only for married couples.
States That Allow Tenancy by the Entirety
Not all states recognize this form of ownership. Those that do include:
- Florida
- New York
- Tennessee
- North Carolina
- Maryland
- Pennsylvania
- Virginia
- Hawaii
Some states extend TBE to both real and personal property, while others limit it to real estate only.
We work with clients across the country and can help determine whether TBE is available in your state and how to structure your property ownership for maximum protection.
Limitations to Be Aware Of
Even though tenancy by the entirety offers strong legal advantages, it is not without limitations. Understanding these potential drawbacks is important to building a solid protection strategy:
- Joint Debt: Because neither spouse is considered to hold a separate, transferable “share” of the property (they both own 100% of the whole), a creditor of only one spouse generally cannot place a lien on the property or force its sale to satisfy an individual debt. The creditor’s claim is against an individual, not the married unit. This shield is removed when the debt is a joint obligation—meaning both spouses are legally responsible for repaying it. In this scenario, the creditor’s claim is against the married couple (the TBE entity), which is the owner of the property. Common examples of joint debt commonly include:
- Mortgages and Home Equity Loans: The most common example, as both spouses are almost always required to sign the mortgage documents when buying the TBE property.
- Jointly Signed Loans: Personal loans, credit cards, or lines of credit where both spouses’ names are on the loan agreement.
- Joint Guaranties: Debts for a business or a relative’s loan that both spouses co-signed or guaranteed.
- Tax Liens: Federal tax liens (such as those from the IRS) often pierce TBE protection, even if the tax debt is only against one spouse, because federal law supersedes state TBE statutes. A joint tax obligation is, of course, a claim against the TBE property.
- Joint Torts/Liabilities: A civil judgment resulting from an accident or lawsuit where both spouses are found liable.
- Divorce: TBE is automatically severed in a divorce, converting the ownership into tenants in common.
- Death: TBE is automatically severed upon the death of one of the spouses, converting the ownership into the sole name of the surviving spouse. (Again, a possible advantage due to probate avoidance, but the surviving spouse may be unaware that their home lacks asset protection.)
- State Variations: Rules about what property qualifies and how protection is applied can vary widely between states.
- Homestead Exemption Interplay: TBE can complement, but not replace, your state’s homestead exemption. If a debt is jointly owned and the home’s equity exceeds the state’s homestead exemption, the home is still vulnerable to the couple’s joint liabilities. (For example, if a couple owns their home in Tennessee and their home’s equity is $200,000, the state homestead exemption of $52,500 is less than the equity. The excess equity of $147,500 above the homestead exemption is exposed to the couple’s joint debts.)
How Tenancy by the Entirety Fits Into a Bigger Strategy
We help clients use tools like TBE as part of broader legal planning. TBE works best when it is part of a comprehensive plan and strategy.
Our attorneys assess your unique situation to determine how TBE and other tools can work together to reduce liability, preserve wealth, and create peace of mind.
Protecting More Than Just Property Titles
Tenancy by the entirety is a simple but powerful form of legal protection. However, it’s not a standalone solution and frequently not the best option. With rising home equity, increased lawsuit exposure, and varying state laws, protecting your property requires more than just the right title.
If you’re married and your home or assets are titled jointly, it may be time to revisit your structure. We can help you determine whether relying upon TBE is the right move and how to integrate it into a smart, proactive asset protection plan.
Schedule your confidential consultation with us today and ensure your property ownership works for your future, not against it.