Taxes Tenants by the Entirety vs. Joint Tenants With Rights of Survivorship By Julie Garber Julie Garber Julie Garber is an estate planning and taxes expert with over 25 years of experience as a lawyer and trust officer. She is a vice president at BMO Harris Wealth management and a CFP. Julie has been quoted in The New York Times, the New York Post, Consumer Reports, Insurance News Net Magazine, and many other publications. learn about our editorial policies Updated on May 23, 2022 Reviewed by David Kindness Reviewed by David Kindness David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning. David has helped thousands of clients improve their accounting and financial systems, create budgets, and minimize their taxes. learn about our financial review board Share Tweet Pin Email In This Article View All In This Article Rights of Survivorship Tenancies by the Entirety Held by Spouses Other TBE Provisions and Protections States That Recognize TBEs Joint Tenants With Rights of Survivorship A Big Difference: Judgment Creditors Photo: Westend61 / Getty Images Important differences exist between tenants by the entirety (TBE) and joint tenants with rights of survivorship (JTWROS). Both are co-owners of the property, but with many different rights and protections against creditors, depending on which way the title is held. One right is the same—that of survivorship. Key Takeaways A surviving spouse or co-owner immediately becomes the sole owner of the property when the other spouse or co-owner dies.Tenants by the entirety are allowed only between spouses. The property is protected from any debts incurred by a spouse who dies. If two unmarried people buy property and then wed, in most states the deed does not automatically convert to tenants by entirety when they marry. Joint tenants with right of survivorship is a form of ownership where property automatically passes to the other owner(s) when one dies. Rights of Survivorship Survivorship rights are automatic in the case of tenants by the entirety. They are provided for by deed in cases of joint tenancy. In most cases, it will avoid probate court and supersede the deceased spouse's or tenant's heirs-at-law or the terms of the deceased's last will and testament or living trust. However, an exception exists when the second spouse or the last tenant dies—or when both spouses or all tenants—die in a common event. The property must be probated to pass to a living beneficiary or heir unless the survivor made other arrangements, such as placing their interest in the property in a living trust. Tenancies by the Entirety Held by Spouses Tenancies by the entirety (TBE) are allowed only between husbands and wives. Each owns an equal share. A bill was introduced in the House in 2019 to officially change the terms "husband" and "wife" to "spouse" to accommodate same-sex marriages and avoid confusion in the interpretation of the statutes. It has yet to advance to the Senate. A similar measure introduced in 2017 was not enacted, either. For the time being, same-sex couples should create TBE deeds with the utmost care and professional help. Doing so will ensure the deed is recognized as intended in their state. Some additional language might be required. Not all states recognize TBE deeds, but some recognize them between civil union partners. Note In most states, a deed does not automatically convert to tenants by the entirety when two buy property as individuals and then marry. A new deed must usually be signed and recorded after marriage to take advantage of this ownership status and convert the old deed to a TBE deed. A TBE deed does automatically convert to a tenancy in common in the event of a divorce. Other TBE Provisions and Protections Neither spouse can terminate the tenancy or sell or transfer their ownership interest without the consent and permission of the other. Note A TBE treats both spouses as a single legal entity. The property is typically exempt from judgments obtained against one spouse for their sole debts or liabilities unless the other spouse agrees otherwise. The property is vulnerable to joint debts that result in judgments, however—those that are contracted for and legally assumed by both spouses. But judgment holders can't otherwise seize property from an innocent spouse who is not legally responsible. An exception to this rule exists with tax debts. The Internal Revenue Service can indeed attach a tax lien to one spouse's interest in a property, even when the tax debt isn't jointly owed. And a creditor or judgment holder can attempt to convince a court to overturn TBE ownership if it was intentionally created in an attempt to defraud them out of what they are owed. Depending on state law, this type of ownership might also be used for bank accounts and investment accounts in some areas. States That Recognize TBEs As of 2022, the following jurisdictions recognize tenancies by the entirety in some form: Alaska: For real estate onlyArkansasDelawareDistrict of ColumbiaFloridaHawaiiIllinois: For homestead property only. Spouses cannot hold their homestead in any other form of ownership.Indiana: For real estate onlyKentucky: For real estate onlyMarylandMassachusettsMichiganMississippiMissouriNew JerseyNew York: For real estate onlyNorth Carolina: For real estate onlyOhio: Only for deeds entered between 1972 and 1985OklahomaOregon: For real estate onlyPennsylvaniaRhode Island: For real estate onlyTennesseeVermontVirginiaWyoming Joint Tenants With Rights of Survivorship A joint tenancy with rights of survivorship (JTWROS) is a type of joint ownership in which two or more people hold title to an asset. They might be related or unrelated. Each tenant has an equal ownership interest in the property. For example, two tenants would each have a 50% interest, and four tenants would each have a 25% interest. These divisions would remain even if one of the tenants were to pay all—or most—of the property costs. Regardless of their ownership interests, all tenants are entitled to the use, possession, and enjoyment of the entire property. The surviving owner or owners immediately become the new owners of the property when one owner dies. Similar to property held in a TBE, it passes outside probate. It doesn't go to the deceased owner's heirs-at-law or beneficiaries under the terms of a will or living trust. Note Each tenant has the right to sell or transfer their share of the property to someone else. Such a sale effectively nullifies survivorship rights because the ownership status automatically converts to tenants in common. Tenants-in-common ownership does not carry survivorship rights. JTWROS ownership can be used with bank and investment accounts, stocks, bonds, business interests, and real estate. It's not the typical default form of holding the title when an asset is held by two or more people. Tenants in common is more common. A Big Difference: Judgment Creditors Joint tenants are not considered a single legal entity, as tenants by the entirety are. A judgment creditor—the party that has proved its debt and may use the judicial process to collect it—can force the property to liquidate to satisfy the judgment. It does this by filing a proceeding for "partition" with the court when one joint owner is successfully sued. However, the tenants who are not parties to the lawsuit or the debt must be compensated for their shares of the property. They would not lose their investments unless they were co-signers on the debt or defendants in the lawsuit. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Cornell Law School Legal Information Institute (LII). "Tenancy by the Entirety." Cornell Law School Legal Information Institute (LII). "Joint Tenancy." Cornell Law School Legal Information Institute (LII). "Right of Survivorship." Farah Roberts LTD. "Avoiding Probate for Real Estate." Fidelity. "Estate Planning for the Home." Congress.gov. "H.R.94 - Amend the Code for Marriage Equality Act of 2019." National Law Review. "The Effect of Obergefell v. Hodges for Same-Sex Couples." PNC. "Five Ways Finances Influence Same-Sex Marriage." Hogan Law Firm. "Real Property Ownership." Michigan State Tax Commission. "Transfer of Ownership Guidelines," Page 19. Cornell Law School Legal Information Institute. "11 U.S. Code § 363.Use, Sale, or Lease of Property, (H)-(J)." Internal Revenue Service (IRS). "188.8.131.52.2.4 (03-05-2019) Tenancy by the Entirety." Internal Revenue Service (IRS). "Innocent Spouse Relief." American College of Trust and Estate Counsel. "Tenancy by the Entireties." Alaska State Legislature. "Alaska Statutes 2018. Sec. 34.15.140." Code of Arkansas Public Access. "A.C.A. § 18-12-608." State of Delaware. "Delaware Code Online Title 25 - Chapter 3 § 309." Code of the District of Columbia. "D.C Law § 42–516. Tenancies in Common, Tenancies by the Entireties, and Joint Tenancies." The Florida Legislature. "2019 Florida Statutes Title XL Chapter 689." Hawaii State Legislature. "§509-2 Creation of Joint Tenancy, Tenancy by the Entirety, and Tenancy in Common." Illinois General Assembly. "765 ILCS 1005 Joint Tenancy Act." Indiana General Assembly. "Indiana Code 2019 Title 32 Article 17 Chapter 3: Tenancy." Kentucky General Assembly. "Kentucky Revised Statutes - 381.05." General Assembly of Maryland. "Real Property § 4 - 108." The 191st General Court of the Commonwealth of Massachusetts. "General Law - Part II, Title 1, Chapter 184, Section 7." Michigan Legislature. "Section 557.71." Mississippi Code. "Miss. Code Ann. § 91-3-9." State of Missouri Revisor of Statutes. "Section 471.030," New Jersey Legislative Statutes. "46:3-17.2 Tenancy by Entirety." Laws of New York. "EPT Estates, Powers and Trusts Part 2 6.2-1." North Carolina General Assembly. "§ 39-13.3. Conveyances Between Husband and Wife." Ohio Laws and Rules. "5302.21 Prior Tenancy by the Entireties or Survivorship Tenancy." Oklahoma States Court Network. "Joint Interest - Joint Tenancy - Tenancy by Entirety." OregonLaws.org."ORS 93.180: Forms of Tenancy in Conveyance or Devise to Two or More Persons." Pennsylvania General Assembly. "Title 23, Chapter 35: Property Rights." State of Rhode Island General Assembly, "§33-25-2. Life Estate to Spouse." Tennessee Code. "§ 66-27-105." Vermont General Assembly. "Title 27: Property, Chapter 005: Conveyance of Real Estate." Virginia General Assembly. "Code of Virginia § 55-20.2." State of Wyoming 65th Legislature. "Wyoming Statutes 34-1-140." Cornell Law School Legal Information Institute (LII). "Tenancy in Common." Sterling and Tucker, LLP. "The Trouble of Joint Tenancy."