Some states recognize real estate ownership in the form of Tenancy by the Entirety (TBE), meaning, a judgment lien can’t be attached to the real property you own with your spouse (if held TBE). Thankfully, Michigan recognizes TBE. The only exceptions to this would be if someone sues both of you or if there is evidence of a fraudulent transfer. DeYoung v Mesler, 373 Mich. 499 (1964), Butler v Butler, 122 Mich. App. 361, 332 N.W. 2d 488 (1983); MCL § 556.221. Tenancy by the Entirety (TBE). TBE means that you and your spouse have full rights to each other’s real property, meaning your spouse owns all of it, while you simultaneously own all of it. TBE is a special type of property interest that applies only to married couples. You create TBE when you take title to the property (by way of the Deed).
What does that mean in plain English? For example, Bob and Sue own a beautiful lakeside home in Kalamazoo, Michigan; the home’s address is 1234 Lakeview. When they took title to 1234 Lakeview, they did so as TBE, by way of their Deed. Bob is a physician, and sadly, Bob was sued for malpractice (and wasn’t covered by his malpractice insurance). The Plaintiff tried to get a judgment lien against Bob’s home, 1234 Lakeview – he can’t. Why? Because Bob owns all of 1234 Lakeview, and simultaneously, Sue also owns all of 1234 Lakeview, so someone with a judgment against Bob can’t get a judgment lien against the house because Sue also owns all of it. With no judgment against Sue, Plaintiff has no claim to 1234 Lakeview.
The take away. In other words, TBE is an undivided interest in the whole. If you are married, TBE is the way to hold your real property. Check with your real estate lawyer. TBE is a basic asset protection strategy available to married couples – use it.
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