Posted on June 7, 2022

Tenants In Common, Joint Tenants, and Tenants In The Entirety In An Illinois Divorce

Being married means starting a life together. For most people, that means owning property together in furtherance of building a home and a family. That real estate can be held in a variety of ways based on how the deed to the real estate is conveyed to the married couple.

In Illinois, property can be held as tenants in common, joint tenants and tenants by the entirety. These labels on the jointly held property impact what happens to the property in life, death and (sometimes) divorce.

Deeds determine how property is held. What is written on the deed will matter, not what the parties intended.

“The deed was unambiguous and its legal effect cannot be changed by parol evidence that it was intended to have a legal operation different from that which would be imported by its terms.” Jackson v. O’CONNELL, 177 NE 2d 194 – Ill: Supreme Court 1961

Tenants In Common In Illinois

If a property is owned by two or more people, property will be held as “tenants in common” unless otherwise stated.

All lands “held or claimed under any grant, legacy or conveyance” are held in tenancy in common unless the premises are expressly declared to pass “not in tenancy in common but in joint tenancy” 765 ILCS 1005/1c

Holding a property together only lasts as long as both parties want to hold the property together.

“In Illinois…the owner of property has an absolute right to dispose of his property during his lifetime in any manner he sees fit” Johnson v. La Grange State Bank, 383 NE 2d 185 – Ill: Supreme Court 1978

When one party dies and the property was held as tenants in common, that party’s share of the property will go to whomever the deceased’s will bequeaths the property to.

Joint Tenancy In Illinois

Holding a property in joint tenancy allows the property to remain with the surviving joint tenant after the death of the other party without any fear of the deceased’s share being given away.

“A joint tenancy is an estate that two or more individuals hold jointly with equal rights.” Gayton v. Kovanda, 857 NE 2d 929 – Ill: Appellate Court, 1st Dist., 3rd Div. 2006

“[A]n intrinsic feature of joint tenancy is the right of survivorship, which entitles the last surviving tenant to take the entire estate” Sathoff v. Sutterer, 869 NE 2d 354 – Ill: Appellate Court, 5th Dist. 2007

“[A will] by a joint tenant, who is survived by other joint tenants, is not effective to pass any title to the real estate held in joint tenancy for the reason that the title immediately passes by operation of law to the survivor or survivors [of the joint tenancy]” Bonczkowski v. Kucharski, 150 NE 2d 144 – Ill: Supreme Court 1958

Joint tenancy is obviously an attractive way for two spouses to hold property if they want to remain in a house after one spouse’s death or not subject their property to probate until both parties are dead.

A joint tenancy can be undone by either spouse if they convey any portion of their share to a third party. Neither spouse will need the permission of the other spouse to make this conveyance and revert the property to a tenancy in common.

“An indisputable right of each joint tenant is the power to convey his or her separate estate without the knowledge or consent of the other joint tenant and to thereby sever the joint tenancy, transforming it into a tenancy in common and extinguishing the right of survivorship” Sathoff v. Sutterer, 869 NE 2d 354 – Ill: Appellate Court, 5th Dist. 2007

Tenancy By The Entirety In Illinois

Tenancy by the entirety takes the unified home ownership that married couples prefer one step further.

First, tenancy by the entirety must be spelled out on the deed very specifically. A deed for tenancy by the entirety must also say that the property is NOT held as tenants in common or as joint tenants.

“Whenever a devise, conveyance, assignment, or other transfer of homestead property maintained or intended for maintenance as a homestead by both husband and wife together during coverture shall be made and the instrument of devise, conveyance, assignment, or transfer expressly declares that the devise or conveyance is made to persons, named and expressly identified in that instrument as husband and wife, not as joint tenants or tenants in common but as tenants by the entirety, the estate created shall be deemed to be in tenancy by the entirety.” 765 ILCS 1005/1c

Tenancy by the entirety is joint tenancy with protections for a spouse against the creditors of the other spouse.

“Joint tenancy is a creature of the common law and dates back to the thirteenth century. Tenancy by the entirety is essentially a joint tenancy, modified by the common law theory that husband and wife are one person. Tenancy by the entirety has two important distinguishing features: it is available only to married couples, and property held by the entirety may not be attached by the creditor of only one spouse.” 765 ILCS 1005/1c (West 1992); 735 ILCS 5/12-112 (West 1992).

“[H]olding property in tenancy by the entirety protects spouses in that the property cannot be sold to satisfy the debt of only one spouse.” Premier Property Management, Inc. v. Chavez, 728 NE 2d 476 – Ill: Supreme Court 2000 

“Any real property held in tenancy by the entirety shall not be liable to be sold upon judgment entered on or after October 1, 1990 against only one of the tenants.” 735 ILCS 5/12-112

In Illinois, only a married couple may own their one home by tenancy by the entirety.

“Unlike joint tenancy, tenancy by the entirety is available only to married couples and their homestead property.” In re Marriage of Del Giudice, 678 NE 2d 47 – Ill: Appellate Court, 1st Dist., 6th Div. 1997

Of course, no one thinks “one day my husband or wife will be broke and creditors will try to foreclose on our home.” So, tenancy by the entirety isn’t usually sought until it’s needed…and this can create a problem.  

If a creditor believes that the property is held as tenancy by the entirety only to avoid this specific debt, it may be deemed a fraudulent transfer.

“[R]etitling property from joint tenancy to tenancy of the entirety is still a conveyance and therefore satisfies the requirements of the Transfer Act.” In re Marriage of Del Giudice, 678 NE 2d 47 – Ill: Appellate Court, 1st Dist., 6th Div. 1997

The Illinois Uniform Fraudulent Transfer Act states that “A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:

  • with actual intent to hinder, delay, or defraud any creditor” 740 ILCS 160/5(a)(1) 

So, if the house was titled as a tenancy by the entirety exclusively to avoid a current debt…it’s probably a fraudulent transfer and a court can then treat the house as being held in joint tenancy.

“[A] creditor may break through that protection only where the property was transferred into tenancy by the entirety with the sole intent to avoid the payment of debts existing at the time of the transfer beyond the transferor’s ability to pay those debts as they become due.” Premier Property Management, Inc. v. Chavez, 728 NE 2d 476 – Ill: Supreme Court 2000

“We acknowledge that the legislature found it appropriate to enable married couples to shield their marital home from the creditors of one spouse. However, there is no indication from either the plain language of the statute nor the legislative history that the legislature intended to include fraudulent conduct within the scope of the afforded protections.” In re Marriage of Del Giudice, 678 NE 2d 47 – Ill: Appellate Court, 1st Dist., 6th Div. 1997

How Does The Way Property Is Held Affect An Illinois Divorce?

All of these particular ways of holding real property between married couples have very little impact on an Illinois divorce.

Marital property in Illinois will be divided in a divorce “regardless of whether titles is held…as joint tenancy, tenancy in common [or] tenancy by the entirety”

“For purposes of distribution of property, all property acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity of marriage is presumed marital property. This presumption includes non-marital property transferred into some form of co-ownership between the spouses, regardless of whether title is held individually or by the spouses in some form of co-ownership such as joint tenancy, tenancy in common, tenancy by the entirety, or community property.” 750 ILCS 5/503(b)(1)

The only way holding title really affects division of assets in Illinois divorce is if the real property was non-marital but is later transferred into a joint estate.

“[A] marital residence owned by both spouses, even if one spouse has furnished all of the consideration for it out of nonmarital funds, will be presumed “in fact” as marital property, absent convincing rebutting evidence.” In re Marriage of Rogers, 422 NE 2d 635 – Ill: Supreme Court 1981

“The placing of title to nonmarital property in joint tenancy with a spouse raises a presumption that a gift was made to the marital estate and the property becomes marital property.” In re Marriage of Rink, 483 NE 2d 316 – Ill: Appellate Court, 1st Dist. 1985

Finally, an Illinois divorce will automatically extinguish any property that was held as a tenancy by the entirety and turn that property into a tenancy in common.

“[T]he estate in tenancy by the entirety so created shall exist only if, and as long as, the tenants are and remain married to each other, and upon the death of either such tenant the survivor shall retain the entire estate; provided that, upon a judgment of dissolution of marriage or of declaration of invalidity of marriage, the estate shall, by operation of law, become a tenancy in common” 765 ILCS 1005/1c

The point of breaking joint tenancy is so a divorced spouse doesn’t inherit their former spouse’s property. The terms of the Marital Settlement Agreement overpower the words on the deed if the other spouse has not removed their name from the deed via quit claim deed. “When an agreement by divorcing spouses concerning property rights is approved by the court and incorporated into the divorce decree, it becomes merged in the decree and the rights of the parties thereafter rest upon the decree.” Coleman’s Estate, Matter of, 395 N.E.2d 1209, 77 Ill.App.3d 397, 32 Ill.Dec. 828 (Ill. App. 1979)

Likewise, the parties (for whatever reason) could agree to maintain their joint tenancy post-divorce. It would be necessary to show that the “intent of the parties that the property remain in joint tenancy until such time as any party desired to exercise his right to sell. Marriage of Dudek, In re, 559 N.E.2d 1078, 201 Ill.App.3d 995, 147 Ill.Dec. 738 (Ill. App. 1990)

How you hold your real property can impact an Illinois divorce. If you own real estate and are considering a divorce in Illinois, contact my Chicago, Illinois family law firm to discuss all of your options with an experienced Illinois divorce attorney.

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Russell Knight

Russell D. Knight has been practicing family law as a Chicago divorce lawyer since 2006. Russell D. Knight amicably resolves tough cases while remaining a strong advocate for his client’s interests.

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