by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
randolphp@umkc.edu

MARITAL PROPERTY; TENANCY BY ENTIRETY: Under an Illinois statute, a conveyance to parties who are husband and wife must specifically state they are husband and wife in order to get the benefit of tenants by the entirety.

Travelers Indemnity Company v. Engel, 81 F.3d 711 (7th Cir. 1996).

Only husband and wives own real estate as tenants by the entirety. Under the law of most states, when a judgment against tenant by the entirety cannot be enforced against the real estate. Illinois recognizes tenants by the entirety, but a statute in Illinois requires that the instrument creating the tenancy by the entirety must also specifically state that the parties are husband and wife. Engels were the sole beneficiaries of a trust and directed Trustee to execute a deed to transfer the real estate to Engels as tenants by the entirety. Trustee did so, but did not state in the conveyance that Engels were husband and wife. A judgment creditor of the husband commenced a supplementary proceeding to satisfy the judgment by requiring the husband to deliver the residence husband owned with the wife to the sheriff for public sale. District Court permitted the enforcement of the judgment. In upholding that decision, the Seventh Circuit merely pointed out that the statute required the instrument of conveyance to persons "named and expressly identified in the instrument as husband and wife." Since the instrument failed to meet the statutory requirement, no tenancy by the entirety was created and the judgment was enforceable against the real estate.

Reporter's Comment: It would be interesting to know why the statute is so written. The parties are either husband and wife or they are not husband and wife at the time of the conveyance and certainly a statement in the conveyance will not change the marital relationship.

Editor's Comment: In light of the fact that a tenancy by the entireties does create a specially protected interest, and one that is irrevocable by act of only one party, it does seem appropriate to hedge the interest with special formalities applicable to its creation. The purpose for requiring formalities would be to insure that the grantor, grantee, and third parties would not inadvertantly create an estate with such far reaching consequences.

The traditional method of creating a tenancy by the entireties is to use the phrase "husband and wife" after the named grantees. So, one can argue that if any special formalities ought to be required, the Illinois statutory requirement is appropriate, in that it requires formalities that are consistent with the usual common law approach.

On the other hand, parties rarely would use the term "tenancy by the entirety" by mistake, thinking that they were creating some other type of estate. Consequently, there doesn't seem to be any good reason to conclude that when this language is used, the parties intend to create a tenancy by the entireties. Such language, when used with a husband and wife, ought to be sufficient.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Laprica Mims at the ABA. (312) 988 6233 or LaPricaMims@staff.abanet.org

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.