The general rule is that property owned by a husband and wife as joint tenants with rights of survivorship is presumed to be a tenancy by the entireties. That means it is is protected from the individual debts of either spouse.
The question is: can property owned by two spouses and a child with the right of survivorship still be tenants by entireties?
The answer is no. There is no tenancy by entireties ownership when a non-spouse is on title with survivorship rights. Tenancy by entireties is limited to property owned by married couples who meet certain ownership requirements. Therefore, a creditor could levy upon the debtor’s spouse’s interest. As there are three equal owners, the debtor’s interest is 1/3 of the property equity.
There is still a way to title property with a child and have entireties protection. Parents can own their share as tenants by entireties and make their child a tenant in common for 1/3 or any other percentage of equity.
The parents’ two-thirds interest in the property would be owned as entireties property. The parents’ estate plan can have left their interest to the child upon their deaths, and the child can bequeath their interest to the parents, thereby accomplishing the same result.
