What Is Tenancy By The Entirety In Illinois?
As an experienced Hinsdale attorney, I often meet clients who want to protect their homes from creditors or ensure their property automatically passes to their spouse upon death. One way Illinois law allows married couples to hold real estate together is through a form of ownership known as “tenancy by the entirety.” Understanding this legal arrangement is essential because it carries specific protections, restrictions, and implications for both spouses. If you’re married and own a home in Illinois, tenancy by the entirety can offer benefits that other forms of property ownership cannot provide.
Under Illinois law, tenancy by the entirety is available only to married couples and only for their primary residence. It allows both spouses to own the property as a single legal entity, rather than two separate owners. This form of ownership is recognized under 735 ILCS 5/12-112, which provides that property held as tenancy by the entirety cannot be forcibly sold to satisfy a judgment against only one spouse. Essentially, creditors of one spouse cannot place a lien or force a sale of the home unless both spouses are liable for the debt. This protection is unique to tenancy by the entirety and is one of its most significant benefits.
Tenancy by the entirety also includes a right of survivorship. If one spouse passes away, the surviving spouse automatically becomes the sole owner of the property without the need for probate. This aspect of ownership simplifies property transfer upon death and can make estate planning more straightforward.
However, tenancy by the entirety also has limitations. It is only available for homestead property, meaning your primary residence. Both spouses must agree to sell, mortgage, or otherwise encumber the property. If both spouses are jointly liable for a debt, creditors can still pursue the property. Additionally, if the marriage is dissolved, the tenancy by the entirety automatically converts to a tenancy in common, meaning each spouse owns a separate share of the property.
Frequently Asked Questions About Tenancy By The Entirety In Illinois
How Is Tenancy By The Entirety Different From Joint Tenancy?
While both forms of ownership include a right of survivorship, tenancy by the entirety provides additional protection from creditors of one spouse. In a joint tenancy, a creditor can attach a lien to one spouse’s interest in the property. Under 735 ILCS 5/12-112, property held as tenancy by the entirety is protected unless both spouses are liable for the debt.
Can Unmarried Couples Hold Property As Tenancy By The Entirety?
No. Illinois law only allows tenancy by the entirety for legally married couples. Unmarried couples may consider joint tenancy or tenancy in common, which do not offer the same creditor protections.
Does Tenancy By The Entirety Apply To Investment Property Or Vacation Homes?
No. This type of ownership applies only to homestead property, meaning the primary residence of both spouses. Other properties owned by a married couple are typically held as joint tenants or tenants in common unless otherwise specified.
What Happens To Tenancy By The Entirety In A Divorce?
When a marriage is dissolved, tenancy by the entirety automatically converts to a tenancy in common. Under Illinois divorce laws, the property is then subject to equitable distribution under 750 ILCS 5/503, and each spouse may own an individual share that can be divided or sold as part of the divorce settlement.
Can Both Spouses Freely Sell Or Mortgage Property Held As Tenancy By The Entirety?
No. Both spouses must consent to any sale, mortgage, or other encumbrance on the property. This requirement is designed to protect the homestead from being unilaterally transferred or burdened by one spouse without the other’s agreement.
Are There Tax Advantages To Holding Property As Tenancy By The Entirety?
While tenancy by the entirety provides legal protections and a right of survivorship, it does not offer specific tax benefits. Tax treatment of property owned by married couples in Illinois is generally the same regardless of whether the property is held as tenancy by the entirety or joint tenancy.
Can Creditors Ever Reach Property Held As Tenancy By The Entirety?
Yes, but only if both spouses are jointly liable for the debt. For example, if both spouses co-signed a mortgage or loan and default, creditors may pursue the property despite the tenancy by the entirety protections.
Call Dan Walker Law Office To Learn More About Tenancy By The Entirety
If you and your spouse own or are purchasing a home, it’s important to understand your options for holding title and protecting your property. At Dan Walker Law Office, we help married couples throughout Hinsdale and the Chicagoland area evaluate whether tenancy by the entirety is the right choice for their situation. We can also advise on estate planning, creditor protection, and property transfer issues under Illinois law.
Contact our Illinois real estate attorney at Dan Walker Law Office by calling (630) 920-8800 to schedule a consultation. Our Hinsdale law office proudly serves clients throughout the Chicagoland metro area, providing reliable legal guidance to help protect your family home.
