Posted by David Krulac on September 06, 2003 at 18:55:11:
Still tired, but here goes…
There have been some recent changes to this, there was a US Supreme Court ruling about June 2002 dealing with this issue.
The issue is “Tenants by the Entireity”, which is only used in 17 states, and not CA or any community property state, or most states west of the Mississippi.
In the particular case where we bought a property there was a $1.2 million IRS lein, HOWEVER the lien was only on the husband. The property was titled in husband and wife’s name as tenants by the entireity. The critical issue was whether they were still married and were both still living. If there was a divorce or one or both members of the marriage was deceased then the “Tenants by the Entireity” priviledge is destroyed. Disolving the marriage either through divorce or death disolves the “T by E” special privledge.
In the Court case the left coast justices, IMHO, did not understand the special circumstances of “T by E”. They essentially gutted the marriage privledge. The IRS argued to the court that the lein of one spouse should go against the assets that are owned as “T by E” and they prevailed. So the circumstances that permitted a property transfer without the transfer OR release of the IRS lein may not be able to be duplicated. Apparently it would take an act of Congress or another Supreme Court case that would overturn that decision. I’m not holding my breathe and don’t expect a law to be passed that only benefits people in 17 states. I don’t know if either OH or IN are “T by E” states.
I had another case where a seperated and divorcING couple had a house.
I was able to get a quit claim deed from the wife and recorded that deed. I knew though that that deed was worthless because a spouse cannot sell their “share” because by the definition of “T by E” they don’t own a divisable share.