Underwriting Manual: MD


Husband and Wife

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State Supplements

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V 1

There are but two choices when a husband and wife wish to own property as tenants by the entirety with a related or unrelated third party or parties. Either 1.) the married couple forgo holding an interest as tenants by the entireties, and all parties hold title as joint tenants with rights of survivorship and NOT as tenants by the entireties or tenants in common; or 2.) the married couple can take title to an undivided interest as tenants by the entireties holding as tenants in common with the third party/parties.  In the latter case, the married couple will have to decide how great their undivided interest will be vis a vis the third party, e.g. two-thirds/one-third undivided interests, one-half/one-half undivided interests or some other division of interest appropriate to their respective investments.

There often appear deeds that purport to transfer title in husband and wife  (either expressly or by implication), as tenants by the entireties or as joint tenants with one or more other persons. Such deeds are especially common when the other person(s) is/are the child of the couple.  We believe that such deeds fail to create a joint tenancy because the common law unities of title and interest cannot exist between the married couple and the other person(s).

Because the estate by the entireties has the fifth unity (marriage), the parents would have a different estate with respect to each other than with the third party in the joint tenancy they are attempting to create.  An entireties estate can only be severed by death or divorce. Neither spouse has a separate right to sell the property or to partition so long as they are married. In a joint tenancy, each of the tenants has the right to sell his/her interest and the right to partition the estate.  A judgment against only one spouse cannot be executed upon by the judgment creditor. On the other hand, a joint tenancy is not affected by divorce, and can be severed by execution on a judgment against one of the joint tenants.

If a title search reveals a deed attempting the entireties/joint tenant estate, it will be treated as though the married couple, as tenants by the entireties, owns the property as tenants in common with the other party.  For example, if the third party is dead an estate will have to be opened. If both spouses are dead, an estate will need to be opened for the second of them to die. Likewise a judgment against the third party or a surviving spouse may attach to his/her interest.

There is no direct case on point in Maryland, but there is a PA case that contains good analysis of the issue: Eidel v. Eidel, 424 A.2d 946; Pa. Super. LEXIS 2062.