WHAT IS THE LAW OF TENANCY BY THE ENTIRETY?
ANSWER: An estate held in tenancy by the entirety is limited to “homestead” property held by a husband and wife “during coverture.” The Illinois statute authorizing transfer of property into tenancy by the entirety states as follows: “Whenever a devise, conveyance, assignment, or other transfer of property, including a beneficial interest in a land trust, maintained or intended for maintenance as a homestead by both husband and wife together during coverture shall be made and the instrument of devise, conveyance, assignment, or transfer expressly declares that the devise or conveyance is made to tenants by the entirety, or if the beneficial interest in a land trust is to be held as tenants by the entirety, the estate created shall be deemed to be in tenancy by the entirety.” (765 ILCS 1005/1c).
CAN LAND HELD IN TENANCY BY THE ENTIRETY BE REACHED BY A JUDGMENT CREDITOR? ANSWER: Yes, if the sole intent of the transfer was to avoid payments existing at the time of the transfer beyond the transferor’s ability to pay those debts as they became due. The Illinois Code of Civil Procedure states that property held in tenancy by the entirety may be reached by a judgment creditor in very limited circumstances: Any real property, any beneficial interest in a land trust . . . held in tenancy by the entirety shall not be liable to be sold upon judgment entered on or after October 1, 1990 against only one of the tenants, except if the property was transferred into tenancy by the entirety with the sole intent to avoid the payment of debts existing at the time of the transfer beyond the transferor's ability to pay those debts as they become due. (735 ILCS 5/12-112). This “sole intent” intent standard is different than the standard required to prove a transfer of property was fraudulent pursuant to the Fraudulent Transfer Act. Under the Fraudulent Transfer Act, a transfer made by the debtor is fraudulent as to the creditor if it...
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