Tenancy By the Entirety in Idaho Explained

When you’re married in Idaho, real estate and other property you acquire during the marriage is community property equally owned by the spouses. If one spouse dies, community property will usually pass to the other spouse, but there may be some special situations. You may also need to plan for separate property. A tenancy by the entirety is a common estate planning tool for married couples, but you’ll need to take a slightly different approach in Idaho.

Idaho Succession Rules When a Spouse Dies

When one spouse dies without a will (or with property not covered by a will) and leaves a surviving spouse, there are three possible outcomes under Idaho intestate succession laws.

  • With descendants: 100% of community property and 50% of separate property to surviving spouse. 50% of separate property to descendants.
  • With parents (no descendants): 100% of community property and 50% of separate property to surviving spouse. 50% of separate property to parents.
  • No descendants or parents: 100% of both community and separate property to surviving spouse.

These default rules may or may not be your intended outcome. For example, your home may be separate property because one spouse bought it before marriage or inherited it, but you may still want 100% of your home to go to your spouse instead of being divided. You may also wish to leave all or part of your share of community property to someone else.

You can achieve virtually any desired outcome using a will or other planning tools. You have the right to determine the disposition of your property including all separate property and your half of community property. It is often a good idea in a healthy marriage to discuss this with your spouse, but you have no legal obligation to do so unless you’ve entered into a separate legal arrangement.

What Does a Tenancy by the Entirety Do?

A tenancy by the entirety is a special way of holding title to a house or other property. It includes the following benefits and restrictions.

  • Both spouses own the property as a whole. They do not have individual control or property rights in “their half.”
  • A tenancy by the entirety can terminate by mutual agreement, death, or divorce.
  • Upon the death of one spouse, the property automatically passes in full to the other. It does not go through probate.
  • Individual creditors of one spouse generally can’t pursue a claim against the property.
  • An individual spouse can’t sell all or a portion of the property, or grant any type of interest in the property, without the consent of the other spouse. This includes using the property as collateral for a loan.

Does Idaho Recognize a Tenancy by the Entirety?

Idaho law does not recognize tenancies by the entirety. An Idaho bankruptcy court held that when a couple tries to establish a tenancy by the entirety, the jointly owned property is still subject to claims by each owner’s individual creditors (In re Antonie, 432 B.R. 843, 851 (Bankr. D. Idaho 2010)).

An Idaho ownership interest labeled as a tenancy by the entirety would typically actually be a joint tenancy with right of survivorship under the law. Tenancies by the entirety created in other states would also typically be treated as joint tenancies with right of survivorship if they now fall under Idaho jurisdiction (for example, the spouses moved from another state).

What is a Joint Tenancy with Right of Survivorship?

A joint tenancy with right of survivorship is similar to a tenancy by the entirety. Here are the key differences.

  • The owners can be anyone, related or unrelated, rather than just spouses.
  • Each owner has an equal share of ownership and full rights to use the property.
  • The right of survivorship means that if one owner dies, their interest passes to the other owner(s). The deceased owner’s heirs have no right to any share in the property or compensation for that owner’s share. For a married couple, the surviving spouse becomes the sole owner.
  • A joint tenant can sell or transfer their interest in the property without the consent of the other owner(s). This would change the ownership to a tenancy in common (no right of survivorship).
  • An individual owner’s creditors can make a claim against the property and force a sale.

What are the Downsides of a Joint Tenancy with Right of Survivorship?

The major downside of a joint tenancy with right of survivorship is the lack of protection against creditors. If one spouse has individual debts, from before the marriage or otherwise, the other spouse could also lose their home.

You may also have concerns about each spouse having unilateral control over their ownership interest. While they can’t sell the entire house without your consent if your name is on the title, such a move could potentially harm your ownership value.

What is a Tenancy in Common?

A tenancy in common is another way of owning property that doesn’t have special restrictions or protections. Each owner owns an equal share unless otherwise specified.

What if the House is Community Property?

If the house is community property and not held in any special form, it may still function similarly to a joint tenancy with right of survivorship. For this to work, the deceased spouse can’t have willed part or all of their share in the home to someone else. If you have concerns about this or over fairness when one spouse has large individual debt, you may wish to consider a prenuptial agreement or making alternative arrangements in your estate planning documents.

What if the House is Separate Property?

If the house is separate property and not held in any special form, it depends on whose separate property it was.

  • Separate property of deceased spouse with descendants or parents: The surviving spouse and descendants/parents each take half an ownership interest in the house. They would need to either agree on living arrangements or sell the house.
  • Separate property of deceased spouse without descendants or parents: The surviving spouse takes a full interest in the house.
  • Separate property of surviving spouse: The house was and remains the property of the surviving spouse.

If these are not your desired outcomes, you can use a joint tenancy with right of survivorship to guarantee that your spouse will become the sole owner. You can also use a will or other planning tools to do things like allow your spouse to live in the house for life before someone else inherits the house or to leave all or part of the house to someone else.

What About Other Property?

You can hold other property besides a house in a joint tenancy with right of survivorship. This can include bank accounts, brokerage accounts, or other assets. The joint tenancy with right of survivorship would work similarly to how it would for a house.

Can a Will or Trust Override a Joint Tenancy with Right of Survivorship?

A will or trust can only transfer what you own. The reason that a will can leave community property to someone other than your spouse is that you have the right to choose what to do with your half of the community property.

When you enter into a tenancy by the entirety or joint tenancy with right of survivorship, you agree to give up interest in the property on death. Therefore, the property skips probate, and your will or trust is disregarded.

Is it Hard to Create or End a Joint Tenancy with Right of Survivorship?

If both spouses are in agreement, buying property to be held as a joint tenancy with right of survivorship is essentially a matter of writing down the magic words when you buy the property. Similarly, all it takes to sell the property or change to a different form of ownership is for both spouses to sign off. If one spouse dies, the surviving spouse only needs to provide a death certificate to become sole owner.

Filling out the forms is only a small fraction of your lawyer’s job. The real challenge is making sure you hold the property in the right form of ownership for your family.

Schedule a Consultation with an Estate Planning Lawyer

If you’re considering a tenancy by the entirety or other options, talk to an estate planning lawyer about what’s right for you.

Contact us today to schedule a consultation.

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