When two people marry, the couple will share their property. Sometimes, couples may want to formalize the situation by establishing a specific type of legal ownership. In Illinois, spouses may co-own real estate in three ways: as tenants in common, tenants by the entirety, or as joint owners with a right of survivorship. If the couple is getting a divorce in Illinois, state law will define what happens to property that is in a state of legal co-ownership.
Tenancy in Common
If multiple people own a piece of real estate and the title does not state how the property is being held, in Illinois, the land is assumed to be a tenancy in common. Each owner has an undivided ownership in the land. This means that while each may own only a percentage of the land, every owner can use the entire property. The ownership shares in the property do not have to be equal. Each owner can sell or bequeath her share in the property without the other owners’ consent. If a couple acquired property as tenants in common prior to the marriage and get a divorce, they will generally remain tenants in common.
Read More: Joint Tenancy vs. Tenancy in Common
For joint tenancy with right of survivorship to exist in Illinois, all of the co-owners must obtain the property at the same time and receive their ownership share through the same deed. All of the co-owners must have an equal ownership share and each owner must have the right to use the entire property. What distinguishes a joint tenancy from a tenancy in common is that when a joint tenant dies, the other joint tenants automatically get the deceased owner’s share of the property. When all but one of the joint owners die, the sole surviving joint owner gets the entire property. However, while they are still alive, the joint tenants can sell their share of the property without the consent of the other owners. If a couple acquires property as joint tenants before the marriage and get a divorce, the divorce proceeding will not affect the property; the two will remain joint tenants.
Tenancy by the Entirety
Tenancy by the entirety is a type of Illinois land co-ownership that is restricted to spouses. Like joint tenancy, the spouses must obtain their ownership in the property at the same time, through the same deed, and each spouse must have equal ownership and rights to use the land. When one spouse dies, the surviving spouse automatically retains all of the property. Creditors can seize property that is a tenancy by the entirety only if the debt in question is a joint debt of both spouses. One spouse cannot sell his ownership interest in the property unless his spouse agrees. If a couple divorces in Illinois, all tenancies by the entirety are terminated and become tenancies in common.
In Illinois, all property acquired during a marriage, except property acquired by one spouse as a gift or inheritance, is marital property. All marital property is subject to division by the divorce court. This is regardless of how the property is held. The court will only divide what the spouses own in the property. So if during a marriage a couple buys a summer home as tenants in common with another person, with each person owning an equal share, only a two-thirds share of that property is marital property.
A divorce does not automatically terminate each spouse’s financial responsibilities to their property in Illinois. If both ex-spouses are on the deed of the property and the property is mortgaged, the ex-spouses both remain responsible for paying the debt. Generally in a divorce, the property is either sold and proceeds used to pay off the mortgage or one spouse retains the land and restructures the debt so that she is solely responsible for making the payments.
John Cromwell specializes in financial, legal and small business issues. Cromwell holds a bachelor's and master's degree in accounting, as well as a Juris Doctor. He is currently a co-founder of two businesses.