In Illinois and many other states, married couples often hold title to their home as tenants by the entirety.
It’s a popular option for good reason: it offers protection from the creditors of the other party and ensures that if one spouse passes away, full ownership automatically transfers to the other. To clarify: The Tenancy by the Entirety creates the legal fiction that each party owns a 100% interest. If a creditor claim is lodged against one party (let’s say, for instance that there is a judgment against one party – like an accident claim) they cannot foreclose against the other party’s interest so the lien just resides against title.
But what happens when that tenancy by the entirety is broken? What does it become, and what risks or changes should homeowners be aware of?
Let’s break it down.
What Is Tenancy by the Entirety?
Tenancy by the entirety is a unique form of property ownership available exclusively to married couples.
It applies to their primary residence only, while the parties are residing in the property, and provides several key benefits:
- The property cannot be sold, mortgaged, or otherwise transferred without both spouses’ consent.
- Creditors of just one spouse generally cannot execute on a lien on the property.
- Upon the death of one spouse, full ownership passes automatically to the surviving spouse, outside of probate.
- If the party who did not have the lien dies last, the lien is not enforceable against the property.
- If the party who did have the lien dies last, the lien is enforceable against their interest in the property.
In short, it offers both asset protection and peace of mind. But this special status doesn’t last forever under all circumstances.
How Is It Broken?
Tenancy by the entirety can be broken in a few specific ways:
Divorce
The most common scenario. Once a divorce is finalized, the legal relationship that allows for tenancy by the entirety no longer exists. The former spouses now become tenants in common, unless a court orders a different ownership arrangement.
Death of a Spouse
While not necessarily considered “breaking” the tenancy, the death of one spouse dissolves the tenancy by the entirety. The surviving spouse becomes the sole owner of the property in fee simple, meaning they own it outright and can sell, transfer, or mortgage it independently.
Mutual Agreement
If both spouses agree to transfer or sell the property, or to change the form of ownership, they can do so. Once the transfer occurs, the tenancy by the entirety ends.
Purchase of a new property that is taken in Tenants by the Entirety
Only one property can be held in Tenants by the Entirety, so one of the properties is not held that way. We normally advise the parties to Deed into a T/E if it is not done initially; or to Deed into a Joint Tenancy if one needs to be changed from a T/E.
Certain Legal Actions
While creditors of one spouse cannot generally force the sale of the home, there are exceptions. For example, if both spouses are jointly liable for a debt or there’s a federal tax lien, the tenancy by the entirety may be affected.
What Does It Become?
When a tenancy by the entirety is broken—such as through divorce—the property typically converts to tenancy in common. Under this arrangement:
- Each party owns a defined share of the property.
- Either party can sell or transfer their share without the other’s consent.
- There is no automatic right of survivorship.
This change significantly affects control, liability, and what happens to the property upon death.
Tenancy by the entirety provides valuable protection for married couples, but it’s not invincible. Life changes like divorce or death trigger a shift in ownership structure, and with that, a shift in rights and risks.
Understanding when a tenancy by the entirety ends, and what it becomes, can help homeowners protect their interests and make informed decisions, especially during life transitions.
The Minchella & Associates Difference
With over 40 years of experience in Illinois real estate law, Erica Minchella has represented thousands of home sellers and buyers, landlords, and commercial and investment property
