How does tenancy by the entirety in North Carolina avoid probate and impact heirs’ inheritance rights?
Detailed Answer
Tenancy by the entirety is a special form of joint ownership available only to married couples under North Carolina law. When a married couple holds real estate or other property as tenants by the entirety, each spouse owns the entire property rather than any divisible share. This form of ownership provides two key benefits:
- Right of Survivorship: Upon the death of one spouse, the surviving spouse automatically becomes the sole owner of the property. No probate court proceeding is necessary to transfer title.
- Creditor Protection: In many cases, creditors of one spouse cannot force the sale of tenancy by the entirety property to satisfy debts, preserving the home for the surviving spouse and family.
Bypassing probate accelerates the transfer process. Probate is a court-led procedure to validate a will, identify assets, pay debts and taxes, and distribute remaining assets to heirs. When property passes by tenancy by the entirety, the deed alone accomplishes the transfer. The surviving spouse avoids court delays, filing fees and public disclosure of asset values.
How does this impact heirs other than the surviving spouse? Because tenancy by the entirety prevents the deceased spouse’s interest from entering probate, their children or other heirs cannot claim a share of that property unless the surviving spouse chooses to include them in a new estate plan. In effect, the decedent’s will cannot distribute tenancy by the entirety property to heirs at death. Instead, the surviving spouse holds full control and may re-title or devise the property through their own will or trust.
North Carolina General Statute § 41-1 outlines the creation and requirements for tenancy by the entirety. You can review the statute here: N.C. Gen. Stat. § 41-1.
Key Points to Understand
- Automatic Transfer: The surviving spouse takes full title upon death without probate.
- Heirs’ Rights: Children and other heirs have no claim to tenancy by the entirety property unless the surviving spouse decides to share it.
- Document Requirements: The deed must use language permitted by statute to establish this form of ownership.
- Limited Creditor Claims: A creditor of one spouse cannot enforce a lien against the property alone.
- Estate Planning Impact: Couples should coordinate tenancy by the entirety with wills and trusts to meet long-term goals.
Next Steps and Call to Action
If you own property with your spouse or want to update your estate plan, understanding tenancy by the entirety can help you avoid probate and protect your family’s inheritance rights. The attorneys at Pierce Law Group have extensive experience advising clients on real estate and estate planning under North Carolina law. To discuss how tenancy by the entirety fits into your situation, please contact us by email at intake@piercelaw.com or by phone at (919) 341-7055.
