When more than one person purchase a real estate property in Illinois, they need to elect how they are to take title to the property. Illinois law provides three basic options: 1) tenancy in common; 2) joint tenancy; 3) tenancy by the entirety.
Tenancy in Common
Tenancy in common is the legal default, i.e. if the deed does not specify any vesting, tenancy in common will be presumed. If the purchasers hold property as tenants in common, they each have an undivided fractional interest in the property, and each have a right to enjoy the use of the entire parcel. In the event one of them dies, the deceased tenant’s interest passes to his or her heirs at law or legatees pursuant to a will. While this may be the desired outcome where the tenants have an arms-length relationship to one another and desire their interest to pass to their family instead of the other, tenancy in common is often not the best choice for married couples. This is because in Illinois, the intestacy statute provides that interest in the real estate of the decedent will pass in part to their surviving spouse, and in part to their children. Thus, if the children of the decedent and surviving spouse are adults, their cooperation and signatures would now be required for the surviving spouse to be able to sell the property. Should one of the children predecease the surviving spouse and have adult children of their own, the surviving spouse would now also need their cooperation and signature. The potential for inconvenience, deadlock and even litigation between relatives is the reason why tenancy in common is not the best choice for most married couples.
Like tenancy in common, joint tenancy provides that all tenants have an undivided interest in the whole property and can use the entire property. However, unlike tenancy in common, joint tenancy provides a right of survivorship. Thus, upon the death of one of the owners, all of his or her interest passess to the remaining owners without regard to wills or laws of inheritance, and without the need to open a probate estate for the decedent. If one of the joint tenants conveys his interest to another person (or himself), the grantee will not acquire title in joint tenancy, but rather as a tenant in common. This, however, will not affect the interest of the other joint tenants, who will maintain the right of survivorship as between themselves. The individual tenants in joint tenancy can have their interest sold, partitioned or encumbered. This can mean that a creditor of one of the joint tenants, can place a lien and encumber title to the property.
Tenancy by the Entirety
Finally, tenancy by the entirety is an option for holding title by married spouses for their residential property. It operates similar to joint tenancy in that it provides for a right of survivorship to a surviving tenant/ spouse, but also provides protection from some creditors, as the individual spouse’s interest in the property can not be sold, partitioned or encumbered by their own creditor. Creditors of both husband and wife, will still be able to go after the property. The right of survivorship and protection from certain creditors makes tenancy by the entirety an attractive form of ownership for many married couples in Illinois.