North Carolina real estate law provides for a special form of property ownership for a married couple called Tenancy by the Entirety (TBE). This type of ownership is only for married couples and provides some special rights and restrictions. These rights and restrictions involve various aspects of ownership control and benefits.
Tenancy by Entirety
North Carolina law designates that real property owned by a married couple is through TBE ownership.TBE is assumed by law, unless the document of conveyance of the property to the couple states otherwise. TBE is not just joint ownership, but a legal holding that the married couple is one person. However, unlike some joint tenancy ownership forms, TBE usually requires the legal consent of each person making up the couple to take any action legally affecting the property.
Rules and Restrictions
In a TBE, both the husband and wife have equal rights to the control, use, possession, rents and profits of the property. Both spouses must legally agree to any sale, leasing, mortgaging or any other act that affects the property or ownership rights. North Carolina law protects the TBE property from the claims or actions of creditors, when only one of the spouses is legally considered the debtor. Estrangement of the couple, even for a length of time, does not void the TBE legalities.
Termination of Estate
The TBE ends by divorce, death or a specific legal agreement to change the form of ownership. The end of the marriage through divorce automatically terminates the TBE, with the court usually ruling on a partition of the property. There is full and automatic transfer of ownership to the survivor if a spouse dies. This transfer is not subject to any will provisions or probate, even if the couple has been apart for a length of time, but never got divorced.
North Carolina law specifies that if a married couple files individual tax returns, then one half of any income or loss from the TBE property shall belong to each spouse for tax purposes. State law also recognizes TBE ownership for married couples who own a mobile home, regardless of whether it is classified as real or personal property. If both of the spouses should die at the same time, then one half ownership shall pass to each spouse's estate.
- North Carolina General Assembly: Statutes: § 39-13.6: Control of Real Property Held in Tenancy by the Entirety
- North Carolina Bar Association; Planning Your Estate: Property Ownership; Carol A. Schwab; May 2000
- North Carolina General Assembly: Statutes: § 41-2.5: Tenancy by the Entirety in Mobile Homes
Kerry Zias has been a strategic business consultant and college instructor of business administration courses since 1990. He has taught courses and performed professional consulting work in the areas of marketing, management, business start-ups, entrepreneurship, real estate, sales psychology and performance, business communications, business law and political/governmental relations. Zias holds a Master of Business Administration in marketing from National University.