IF YOU ARE MARRIED AND YOU OWN A HOME, ARE YOU SURE YOU HAVE DONE EVERYTHING YOU CAN TO PROTECT THE HOME FROM POTENTIAL CREDITORS
CREDITOR’S BEWARE. Since 1994, the principal residence of a married couple (“Property”) is typically protected from the reach of creditors if the couple holds title to the Property as Tenants by the Entirety and a judgment is entered against one spouse. That is, a creditor cannot force the sale of a Property to collect on a judgment against only one spouse which is properly held as Tenants by the Entirety.
This is one of the few marital protections in Illinois that actually deters creditors.
Who needs to check their deed to see if they have this protection?
- A married couple that purchased a Property prior to 1994.
- Couples that took title to a Property prior to marriage or a civil union.
- A married couple that sells their marital residence and buys and moves into a new martial residence (a married couple can only have one house as tenants by the entirety).
- People who hold title in a Revocable Trust. Effective January 1, 2011, spouses no longer must choose between the protection against creditors provided by tenancy by the entirety and the estate-planning advantages of a revocable trust. If you have a Property in a Revocable Trust, especially prior to 2011, it is worth a look.
Parties that are in any of these categories should hire an attorney to check the deed and manage the title to the Property accordingly.
This information does not constitute legal advice and does not create an attorney-client relationship.
Philip Fornaro is owner of Fornaro Law at 1022 S. La Grange Road and a Vice President of the La Grange Business Association.