Joint Tenancy and Tenancy by the Entirety: Creditor Liabilities
Joint tenancy and tenancy by the entirety are two separate forms of property ownership. In a joint tenancy, the co-owners (tenants) of the property own an undivided share/interest in the property. The most important aspect of a joint tenancy is that it has a beneficiary designation. If one of the tenants dies, his/her interest in the property passes automatically to the other tenant. This is not the case with other forms of property ownership, like a tenancy in common.
To create a joint tenancy, the so-called “four unities” must be present: (1) unity of time, (2) unity of title, (3) unity of interest, and (4) unity of possession.
A tenancy by the entirety, on the other hand, is essentially property owned jointly by a husband and wife. In Missouri, an instrument that would create a joint tenancy in any two grantees will also create a tenancy by the entirety if the grantees are husband and wife. In the case of dissolution of marriage, a tenancy by the entirety will be severed.
There are many advantages to holding title to property jointly. Title usually passes immediately, thereby avoiding the need for probate administration. Claims of creditors may be defeated (e.g., with a tenancy by the entirety, entirety property cannot be levied upon to satisfy the individual debts of only one of the spouses). Funds are immediately available for use and it is in many ways much more efficient.
Contact us if you have any questions pertaining to joint tenancy, tenancy by the entirety, or other forms of personal and real property ownership or conveyances.