Often during an estate planning process, it is often necessary to review the deeds to any real estate our client own in order to determine how assets will pass upon the client’s passing. At this time, clients often ask about the legal language used in the deed. But what do these terms mean? Although both terms sound similar, they both grant very different rights to the parties.

The terms tenants by the entirety is a form of real estate ownership that only a husband and wife can have. If the deed does not expressly use this term, then a deed that specifies the land is owned by spouses signifies the tenants by entirety relationship. This ownership grants survivorship and inseverability to the ownership. Survivorship means that upon the death of one of the spouses, the other spouse absorbs the other’s ownership interest by operation of law. Therefore, this real property will pass outside of the provisions of the spouses Will. Inseverability means that neither spouse has the authority to sever, alienate, or otherwise affect his/her share of the property without the consent of the other spouse. Additionally, since both owners are spouses, the transfer upon death to the surviving spouse is not a taxable event.

On the other hand, New Jersey Statutes dictate that unless the grantees are married, or the deed specifies a joint tenancy, a conveyance from a grantor to multiple grantees creates a tenancy in common. It is presumed that the home is owned equally with other co-owners however the deed can specify otherwise. Further, there is no survivorship feature. Therefore when one owner passes away, that owners share passes under their estate. Each owner also has the authority to sell his/her share without consent of the other owner. No single co-owner has the right to out the other co-owners from occupying the property.

Clearly, the language used in a deed is extremely important. I strongly advise an individual to consult with an attorney before transferring any real estate.

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