In Massachusetts, and possibly in other states as well, significant protection is given to the non-debtor spouse if the married couple elects to take title as “husband and wife, tenants by the entirety”. There are other advantages to tenancy by the entirety, such as avoiding probate, but the principal advantage is one of protection. The bottom line is this: IF YOUR PRINCIPAL RESIDENCE IS PROPERLY PUT IN YOUR NAME WITH YOUR SPOUSE, AS “HUSBAND AND WIFE, TENANTS BY THE ENTIRETY” A CREDITOR CANNOT ATTACH YOUR HOUSE, OR FORECLOSE ON YOUR HOUSE, FOR AN OBLIGATION INCURRED BY THE OTHER SPOUSE.

It is important to note that, in Massachusetts, you must be married at the time you take title, the property must be your principal residence, and the deed must include the “husband and wife, tenants by the entirety” language. A deed to only “husband and wife” creates a tenancy in common. A deed to “married persons” creates a joint tenancy without the protections described above. A deed to unmarried persons as “tenants by the entirety” also creates a severable joint tenancy.

Even though “tenancy by the entirety” creates important protection to a married couple, I still recommend that one of the married owners record a Declaration of Homestead. There is a $35 filing fee involved, and a small fee for producing the document, but that is the spouse’s only exposure. In exchange, a Massachusetts Homestead declarant receives insulation of up to $500,00 of equity in his or her home (subject to some “anti-fraud” provisions in the Federal Bankruptcy Law and a few other exclusions). This type of protection is especially helpful in the following situations:

     1. The obligations involved are “joint” so that tenancy by the entirety will not protect.

     2. There is a divorce or death, which has the effect of terminating a tenancy by the entirety.

     3. There are minor children in the home, who are protected by a Declaration of Homestead.

There may be circumstances, mainly for wealthy clients who need to establish individual assets for estate planning reason, where tenancy by the entirety is not the proper choice for ownership. In more than forty years of practicing real estate law, I have not identified ANY situation where filing a Declaration of Homestead is not advantageous. I would be more than happy to discuss any aspects of this post with potential Massachusetts property owners, or out of state individuals who are considering a purchase of real estate in Massachusetts. The consequences of the choices such as the ones described herein can be important, and you need to know what you are getting into before deciding which type of ownership is best for you.