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Special Ownership for Married Couples: Tenancy by the Entirety

12/26/2019

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Married couples have a special way to jointly own property in some states including Massachusetts that has advantages over regular joint ownership. If you are married and own property jointly, you should make sure you have the right form of ownership. 

Joint tenants must have equal ownership interests in the property. If one of the joint tenants dies, his or her interest immediately ceases to exist and the remaining joint tenant owns the entire property. The advantage to joint tenancy is that it avoids having an owner's interest probated upon his death. The disadvantage is that creditors can attach one tenant's property to satisfy the other’s debt. 

Some states give married couples another option to own property jointly and avoid probate, but also have protection from creditors. Tenancy by the entirety has the same right of survivorship as a joint tenancy, but one spouse cannot sell his or her interest without the other spouse's permission. The creditors of one spouse cannot attach the property or force its sale to recover debts unless both spouses consent. Creditors may place a lien on property held in tenancy by the entirety, but if the debtor dies before the other spouse, the other spouse takes ownership of the property free and clear of the debt. This is why if you have a tenancy by the entirety, both the husband and wife are required to sign the mortgage on their property for the mortgage to be valid. 

Tenancy by the entirety is available in half of all states and the District of Columbia. Some states recognize it for all property; other states only recognize it for real estate. States with tenancy by the entirety are: Alaska, Arkansas, Delaware, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and Wyoming. 
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If you own joint property with a spouse in a state with tenancy by the entirety, you should check to make sure the property is owned as tenants by the entirety. In addition, unmarried couples who buy property and subsequently marry each other should check if they can re-title the deed as tenants by the entirety to avail themselves of the greater protections this form of tenancy offers.


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Informal versus Formal Probate Administration and Real Estate

5/17/2015

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With the enactment of the Massachusetts Uniform Probate Code (M. G. L. 190B)  we now have a new option in estate administration: informal probate.  The key advantage appears to be the ease and speed in which a personal representative can be appointed.  In theory, upon just seven days advanced notice to interested parties and MassHealth, a petition for informal probate can be brought and acted on by the probate court.

When one of the probate assets is an interest the decedent held in real estate, consideration should be paid from the outset as to whether formal probate is preferred to informal probate.  I tend to group the factors into whether the property will be sold quickly or will the beneficiaries keep the property:

Will the Property be Sold Quickly?  If the intent is to sell the real estate out of the estate and distribute the proceeds to the beneficiaries, informal probate may be adequate.  REBA Title Standard 10 indicates that the personal representative with the power to sell in the Will has the power to convey title to the purchaser free from claims of creditors.  Land Court indicates that it will recognize a deed signed by an informally appointed personal representative.  In fact, informal probate may be ideal for this situation where a pending sale requires the quick appointment of a personal representative through informal versus formal probate.

Will the beneficiaries of the estate keep the property for the foreseeable future?  If so a formal determination of heirs of the estate may be necessary in cases where there is no will in order to vest title to the real estate into the heirs.  With registered land it is necessary to have a formal opening to change ownership with the land court.  A deed of distribution showing title transferring to the beneficiaries of the estate alone may not be enough to convey clear title.  With an estate opened with an informal proceeding, a formal closing proceeding may be the best way to terminate the personal representatives power to sell under the Will as well as clear the title of creditor claims and costs of administration (M.G.L. ch 202 s 20a) which could in theory attach to the real estate for up to 6 years from the date of the bond.

While informal probate can be tempting with its ability to quickly have a personal representative in place, a careful analysis of informal versus formal proceedings should be done prior to initiating a probate proceeding so the above factors and others can be addressed early on.  Every situation is different and therefore it is best to review this with an attorney before filing for probate.


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    meet the attorneys

    Peter C. Herbst Jr
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    Areas of focus: estate planning, estate & trust administration and elder law. 
    Briana N. Nashawaty
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    Areas of focus: estate planning, estate & trust administration, and 
    elder law.

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