With Valentine’s Day just passed, I was inspired to write a piece explaining one of the great benefits of marriage – buying real property and holding title as tenancy by the entirety.
Illinois law allows couples to hold title to real property in three different ways: tenancy in common, joint tenancy, and tenancy by the entirety. Each way has certain strengths based on the circumstances of those involved, but – typically – tenancy by the entirety has the greatest strength for the owners. Only a married couple can hold title to real property as tenancy by the entirety.
Typically, holding title as tenancy in common is best suited for those entering a joint business venture – the persons own undivided shares of the real property without a right of survivorship. For instance, if you and I buy a house as a rental investment, then we each own an undivided one-half interest therein. However, if I pass, then my half of the house passes in accordance with the Probate Act if I do not have a will, or is devised to the designated beneficiary in my will.
For those who have a more intimate relationship, but who are not married, then joint tenancy may be best suited. Joint tenancy is obtained when two or more persons take identical interests in the real property via the same instrument (i.e. deed), with the same right of possession, and with a right of survivorship. Using the above example, this time, when I pass, my interest goes automatically to you, whether or not I have a will.
Finally, only a married couple can own real property that is their homestead as tenancy by the entirety. It has all of the qualities of joint tenancy, but with an additional protection: a creditor holding a judgment against only one of the married persons typically cannot foreclose their judgment affecting the homestead real property.
What I’m seeing more commonly is engaged people buying real property. Because they are not married, they can only take title as joint tenants. And, the act of marriage does not transform the title to one of tenancy by the entirety; instead, the now-married couple must execute a quit-claim deed from themselves to themselves, and specifically state they are taking title, not as tenants in common or as joint tenants, but as tenancy by the entirety to gain the additional marital protection.