What typically happens to property held as tenancy by the entirety upon the death of one spouse?

In a tenancy by the entirety, which is a form of joint ownership available only to married couples, each spouse has an equal and undivided interest in the property. One distinctive feature of this type of ownership is the right of survivorship. This means that when one spouse passes away, full ownership of the property automatically transfers to the surviving spouse without the need for probate or any other legal proceedings.

This arrangement provides a level of security for both spouses, as it ensures that the surviving spouse retains complete control and ownership of the property. Therefore, the concept of tenancy by the entirety allows the surviving spouse to avoid complications that can arise from division of property upon the death of one partner, as would happen in other forms of co-ownership.

In contrast, the other options presented do not accurately reflect the legal implications of tenancy by the entirety. Property being equally divided, sold, or transferred to the state does not align with the right of survivorship feature integral to this ownership structure.