Husbands and Wives: How do you own your property?

Did you know that when two or more people own the same property, there are actually three different ways that ownership can be titled?  Depending on which of those three types of ownership is in effect, the joint owners can have different rights and protections as it relates to the property.  In Pennsylvania – and some, but not all, other states – there is a special way that Husbands and Wives can hold property.  It is called “Tenants by the Entirety,” and it offers unique and important protections to married couples.  Here are two big advantages to owning property as Tenants by the Entirety:

Protection During Life:  When Husbands and Wives own property as Tenants by the Entirety, creditors of only one spouse cannot reach the jointly owned property to satisfy their claim.  For example, if Husband is in a car accident and is sued for $1 million, even if the plaintiff wins the law suit, he may not reach the property (think primary home!) owned by Husband and Wife as Tenants by the Entirety to satisfy that claim.  Other property of the husband, or even other jointly owned property, might be available to the creditor- but NOT property owned as Tenants by the Entirety.  This is why, when I counsel married couples who own a home, I like to pull the Deed to their home and ensure they have this important protection in place for their primary residence.  Of course, changing ownership to Tenants by the Entirety after you receive notice from a creditor is no help- this would be a form of fraud!  And sometimes there are tax issues that make it important for spouses to own their home in their individual name.  But, for the most part, Husbands and Wives who proactively ensure they own their home as Tenants by the Entirety are making a smart move.

Better Transition at Death:  In addition to the lifetime protections of Tenants by the Entirety, property owned in this way at the death of one spouse passes immediately and wholly to the surviving spouse by operation of law.  This is important for two reasons.  First, since the property passes to the surviving spouse by operation of law, it will not need to pass through the Probate process.  This can help to avoid a process that is sometimes complicated and costly.  Second, since the property passes immediately to the surviving spouse, generally speaking, creditors of the deceased spouse again will not be able to reach that property to satisfy any claims they have against the deceased spouse.

Husbands and Wives should seek professional legal counsel to see if holding property in this way makes sense for them.  These protections are offered uniquely to spouses, and in most cases, Husbands and Wives should own at least their primary residence in this way, to make the most of the protections available to them under the law.

About the Author

Neal Rice | Rice Law FirmNeal is a former Army Officer turned estate planning, real estate & business law attorney.  He is the founding attorney of the Rice Law Firm, in Lancaster County, Pennsylvania. Outside of work, Neal enjoys time with his wife and family, serving his church, boating, traveling, and a good Philly cheese steak. You can email Neal at, or visit the Rice Law Firm.

This blog entry is for general information purposes only.  It is not intended to provide specific advice on individual legal, financial, or tax matters. It is not intended to and does not establish an attorney-client relationship.  Please consult an appropriate legal or tax professional for advice pertaining to your unique situation.