Some types of property are referred to as non-probate property, meaning they bypass probate entirely. The most common reason for property to bypass the probate process is it automatically becomes the property of a designated individual after the decedent's death. Non-probate property includes life insurance proceeds, payable-on-death accounts, joint tenancies with right of survivorship and tenancies by the entirety.
Probate proceedings serve to distribute property, among other things. During probate proceedings, property is distributed according to a decedent's last will and testament or according to a state's laws of intestate succession if the decedent failed to make a will. Because testators cannot leave their interests in a tenancy by the entirety to someone in a will -- nor does an interest in a tenancy by the entirety pass to someone via laws of intestate succession -- a tenancy by the entirety does not go through probate.
Tenancy by the Entirety
Only married couples are allowed to own a tenancy by the entirety. In a tenancy by the entirety, a married couple owns a piece of property as one legal entity. Each spouse owns a 100 percent share and has the right to possess the entire property. Neither spouse is permitted to unilaterally convey any interest in the tenancy by the entirety to someone else.
In a tenancy by the entirety, when one spouse dies, his share passes to his surviving spouse. Because of the nature of the interests in a tenancy by the entirety -- namely, that they pass to a surviving spouse by operation of law -- these interests do not go through the probate process. Once a spouse dies, the title to the tenancy by the entirety vests completely in the surviving spouse.
Termination of Tenancy by the Entirety
Once a spouse dies and his share passes to his surviving spouse, the tenancy is terminated. However, these tenancies may be terminated during both spouses' lifetimes in the event of divorce or if both spouses agree to termination.