What Happens to Tenancy by the Entirety When You Move Property Into a Trust?
In Virginia, married couples can own property as tenants by the entirety (TBE). This special ownership means:
- Both spouses own the whole property together
- The surviving spouse automatically inherits it
- Creditors of just one spouse typically can’t reach the property
This applies to real estate and even joint bank accounts.
So What If You Transfer TBE Property Into a Trust?
Many couples use trusts in estate planning—but does that end TBE protection?
Not necessarily. Virginia law (Va. Code § 55.1-136) allows you to keep that protection if:
- You’re still married
- The property goes into one or more trusts
- Both of you remain the current beneficiaries
In other words, you can have a trust and still maintain creditor protection—if the trust is set up the right way.
Example
Sam and Taylor own their home as TBE. Taylor has old debts. If they transfer their home into a joint trust (or two coordinated ones with both as beneficiaries), the home remains protected—because they still meet the key requirements.
Heads-Up
The protection can be waived—if allowed in the trust or agreed to in writing. So careful drafting matters.
The Takeaway
With the right setup, you don’t have to choose between trust-based planning and TBE protection. You can have both. It’s about knowing the rules and structuring things wisely.
Want to explore your options?
Book a Peace of Mind Planning Session to learn how to protect your home and your legacy.