How to Define Tenancy by Entirety

It is a homeowner's biggest fear, losing the family home. There is protection, even when bankruptcy is imminent, especially for married couples. Tenancy by entirety protects the home and the home equity from creditors. It is a law that is constantly changing, although the basic premise stays the same.

Instructions

1. Search the state laws. Tenancy by entirety varies from state to state. Consult your state's laws to see what the restrictions are. Your state may have inherent tenancy by entirety laws or you might have to officially file for protection.

2. Own the property through the marriage. Tenancy by entirety laws protect the home by assigning it to a third party--the marriage bond. Under the law, the home belongs not just to one spouse or another, but to the marriage itself. That is how this law prohibits tax and creditor liens in most cases.

3. Protect both spouses through the law. Tenancy by entirety laws are built on the premise that the wife cannot be held accountable for the debts of the husband and vice versa. Case law has evolved to allow the creditor to attach the debting spouse's part of the equity, but the remainder cannot be touched.

4. Keep the property unchanged. If the creditor does succeed in putting a lien on the home, he cannot separate that property and sell it. The home must remain whole as long as a spouse has interest (ownership of half the equity). The creditor and remaining spouse own the home together. The creditor is even responsible for part of the home ownership costs, such as plumbing, heating and gardening.

Tips & Warnings

• Consult an attorney to better understand the tenancy by entirety laws in your state.

• Fraudulent transfers override the law. The home must be deeded to both spouses to get tenancy by entirety protection. It is against the law to add a spouse to a deed after attachment proceedings begin.

• Tenancy by entirety does not protect you from foreclosure.