West Virginia is one of many states that does not recognize tenancy by the entirety as a property ownership structure. Married couples in the state can hold property as joint tenants with rights of survivorship or as tenants in common. This allows a surviving spouse to retain ownership of the property upon the death of the other. However, unlike tenancy by the entirety, these ownership structures do not offer the same level of protection from creditors seeking to collect debts owed by only one spouse. Couples looking for similar asset protection may need to explore alternative legal arrangements, such as trusts or specific contractual agreements.
If you need help planning for what happens to your assets when you’re gone, speak with a financial advisor to see how they can potentially help.
Tenancy by the entirety is a legal form of joint property ownership available to married couples in certain states. It considers both spouses as a unified legal entity, requiring mutual consent for any sale, transfer, or financial claim against the property. A major benefit is shielding the property from creditors – debts incurred by one spouse typically cannot result in a forced sale to settle obligations.
Additionally, this ownership type includes a right of survivorship, ensuring that when one spouse dies, the other automatically inherits full ownership. This structure differs from joint tenancy, another form of property ownership employed for estate planning and asset protection, by offering stronger safeguards against individual financial liabilities. This feature makes tenancy by the entirety a preferred option in states where it is recognized.
About half of the states recognize tenancy by the entirety. That list does not include West Virginia. Instead, the state allows married couples to hold property as joint tenants with rights of survivorship or as tenants in common.
West Virginia's form of joint tenancy ensures that when one owner dies, the surviving owner automatically inherits the deceased's share. This form of property ownership is the primary means for married couples to hold property with survivorship benefits in West Virginia. However, creditors may still claim the indebted spouse's share of the property, leading couples to seek alternative ways to shield their assets from creditors.
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Although West Virginia does not recognize tenancy by the entirety, married couples can use various other legal strategies to protect their assets from creditors and financial risks. These methods can help shield jointly owned property and prevent forced asset sales, in addition to protecting ownership rights of survivors.
A trust allows couples to transfer ownership of assets to a separate legal entity. Since they don't own the assets after the transfer, this shields them from certain financial risks. There are two main kinds of trusts: revocable and irrevocable.
A revocable trust enables the couple to maintain control over their assets while avoiding probate. However, revocable living trusts do not provide full protection from creditors.
An irrevocable trust removes assets from the couple's direct ownership, meaning creditors cannot seize them. Unlike a revocable trust, an irrevocable trust's terms cannot be changed once established. This option is often used for estate planning and asset protection.
Joint tenancy with rights of survivorship ensures that when one spouse passes away, the surviving spouse automatically inherits full ownership. This arrangement helps avoid probate, simplifying the transfer of property. However, it does not shield the property from creditors seeking to collect debts owed by one spouse. If a creditor wins a judgment against one spouse, their share of the property may be subject to legal claims.
Legal agreements between spouses can help protect assets by defining ownership and financial responsibilities.
A prenuptial agreement, signed before marriage, can designate specific assets as separate property. This agreement can shield these assets from future legal disputes.
A postnuptial agreement, signed after marriage, can serve a similar purpose, clarifying how assets should be divided in the event of financial issues, divorce or death.
While these agreements do not provide creditor protection, they help ensure that each spouse retains control over their designated assets.
Carrying umbrella liability insurance can offer additional protection by covering legal claims beyond standard homeowners or auto insurance policies. This is particularly beneficial for couples with significant assets.
Meanwhile, West Virginia's homestead exemption protects a portion of a primary residence from creditors, though the exemption amount varies. Consulting an attorney can help clarify eligibility and benefits.
Without tenancy by the entirety, married couples in West Virginia must rely on other methods to protect assets and secure inheritance rights, such as trusts, legal agreements, and insurance strategies.
Retirement accounts, life insurance policies and jointly held assets often pass outside of a will, making beneficiary designations crucial. Regularly reviewing and updating these ensures assets go to intended recipients and prevents conflicts. Additionally, titling assets properly – such as using joint tenancy with rights of survivorship (JTWROS) or transfer-on-death (TOD) designations – can streamline asset transfers and bypass probate.
Some financial advisors also have expertise in estate planning, and can help you manage your assets with an eye toward the next generation. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
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