Question: My wife and I own a house as "Tenants by the Entirety." This is our second marriage, and we each have children from those marriages. We have agreed that if one of us dies, the survivor will have the right to stay in the house as long as he or she lives, but on the death of the survivor, the house will be divided equally among all of our children. We have written a simple Will spelling out our intentions, but we are not sure that this Will is sufficient. Is there anything more we should be doing?

Answer: Yes, you must do more. As you have described your situation, your Will -- for all practical purposes -- is meaningless and will not accomplish what you intend.

Your house is owned by both of you as Tenants by the Entirety. This is a form of title reserved exclusively for a husband and wife. This means that you both own the entire property as one entity. It is not divisible, and neither spouse can sell or in any way dispose of an interest in the property without the consent of the other owner.

When one spouse dies, the other spouse automatically becomes the full owner of the entire property. This is what we lawyers call a transfer "by operation of law".

There is nothing you can do in your will to defeat this legal occurrence. More significantly, you should recognize that if one of you should die, the survivor -- if he or she is so inclined -- can change the terms of the will, so as to defeat your joint and mutual purposes.

Needless to say, this is not a pleasant subject. But the fact remains that neither you nor your wife's intentions may be carried out as you have structured your legal affairs. In many cases, honor and courtesy between all the children will end up resolving the difficult legal questions. Otherwise, you -- or they -- may get involved in a full blown court case.

The first thing you should do is clarify your intentions. You have indicated that you want the house to be divided equally among all of your children. How exactly do you want this to work out. If the husband has two children and the wife has three, does this mean that each child will get one-fifth of the house? Or do you really want the house to be divided so that the husband's children get one half and the wife's children get the other half?

You must think this through very carefully. You should try to avoid a clash between the relatives. If your intention is to give half of the property to your children and half to your wife's children, change the form of title from "Tenant by the Entirety" to a "Tenant in Common" relationship.

You should understand, however, that this would allow creditors to reach and attach the property is there is a judgment against either of you Your lawyer can assist you in drafting the necessary papers, and the legal fee should be minimal. Since this would be a transfer "for love and affection," without any other consideration, there should be no transfer or recordation tax required by the jurisdiction in which your property is located. However, rules vary by state so readers should check with their legal counsel for specifics.

You should note that if you hold property as Tenants in Common, on the death of one spouse, it will be necessary to go to probate on that portion of the property previously owned by the deceased spouse. While this will add additional expense, it may be worth it to assure full and complete compliance with your desires.

Additionally, you should make absolutely sure that your Wills are in proper form and shape. How old are your children? If they are minors, have you designated a guardian? Have you established a trust arrangement, so that the property goes in trust until the children reach the age that you will be comfortable with their taking over the responsibilities of property ownership. If you have more than one child, have you adequately protected both of them?

And, more significantly, have you adequately protected your spouse's interest in having free and unlimited use of the entire property until his or her death? When one spouse dies, who will be responsible for paying the real estate taxes, the insurance and any mortgage payments on the house? Who will be responsible for maintaining the house during the lifetime use of the surviving spouse.

All these questions must be considered -- and the answers reduced to writing -- while you are both alive.

You may also want to consider transferring interests in the property to revocable trusts for the use and enjoyment of the property on the death of one of you. The taxable consequences of having an estate over $675,000 are significant, and you should also seriously consider discussing your entire estate planning with a competent estate counselor. It should be noted that this threshold will increase in year 2002 to $700,000 under current law, although Congress may change this during the current Congressional session.

This is an issue that most of us shy away from. Yet, if you have not adequately protected your estate and spelled out your intentions, it may very well be that a judge and a court -- and the Internal Revenue Service -- will make the decisions for you.

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