Title Ownership and Quit Claim Deed in Illinois
I am quit-claiming my property. What is the difference between Tenancy by the Entirety, Joint Tenancy and Tenancy in Common?
While all of these sound very similar, there are very distinct differences between the main three forms of ownership of Title that can drastically change what creditors and your heirs may obtain from your property later on.
Tenancy by the Entirety should be the most common form of Title ownership to be chosen by married couples who buy property and chose to make it their primary residence. By choosing this form of ownership, creditors trying to collect on the debt of one spouse cannot place a lien on the property. In addition, if one spouse passes away, the other spouse gains full ownership of the property without having to go through probate, which could save considerable costs.
So for example, if one spouse has a credit card with Chase, Chase cannot put a lien on the house for that debt since the lien would impede on the ownership interest of the other spouse. This also becomes a benefit during bankruptcy if there is a lot of equity in the property and only one spouse is filing. With Tenancy in the Entirety, the equity does not make a difference as the bankruptcy court cannot attach to any interest in the house.
The other two types of ownership forms are Joint Tenancy and Tenancy in Common. Joint Tenancy is usually chosen by close relatives who buy or live in a property together. While the benefits of creditor attachment do not exist, the property does pass to the other titleholder upon death free and clear of any claims against the descendant’s estate without having to go through probate.
Tenancy in Common, on the other hand, gives people who each want their divided interest in the property the flexibility to do just that. They can assign their interest to their individual heirs and the full Title to the property does not pass to the surviving individual on Title. This is usually used for friends or roommates who purchase property together or even married couples who want such flexibility without much protection from creditors.