Married couples have a special way to jointly own property in Indiana and many other states 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 with rights of survivorship 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.
The State of Indiana gives 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, 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 many other states and the District of Columbia. Some states recognize it for all property; other states only recognize it for real estate.
If you own joint property with a spouse in Indiana or another state, 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.
To review your options with Indiana owned property, contact us today to schedule an appointment. If you own property outside Indiana and want to review options for that property, you will need to contact legal counsel in that state. We are happy to provide a referral to out-of-state legal counsel upon request.