What type of co-ownership allows a spouse to inherit the other spouse's ownership interest upon death?

The correct answer is that tenancy by the entirety allows a spouse to inherit the other spouse's ownership interest upon death. This form of co-ownership is specifically designed for married couples and creates a right of survivorship. In a tenancy by the entirety, when one spouse passes away, their ownership interest automatically transfers to the surviving spouse, ensuring that the property remains with the living partner without the need for probate.

This setup not only secures the surviving spouse's rights but also provides additional protection against creditors, as the property can't be divided or sold without the consent of both spouses. This distinguishing characteristic differentiates tenancy by the entirety from other forms such as joint tenancy, which also includes a right of survivorship but is not limited to married couples. In joint tenancy, owners can be any individuals, meaning their share can also be passed to heirs or designated individuals rather than automatically to the surviving co-owner.

In contrast, community property refers to assets acquired during the marriage, where both spouses equally own the property, but this does not inherently include a right of survivorship. Tenancy in common allows each co-owner to possess a share in the property, which can be transferred or inherited independently, meaning one spouse would not automatically inherit the other’s share.