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Question

Difficulty: MediumCustomer Account Types and Ownership Structures

An investor and her adult son apply to open a joint brokerage account with equal trading privileges. They instruct the registered representative that upon the death of either account holder, the deceased party's share of the account assets must be transferred to their designated heirs through probate as specified in their will, rather than automatically transferring to the surviving account holder. Which account ownership structure must the broker-dealer use to fulfill this registration requirement?

  1. Tenants in Common (TIC)Answer
  2. B
    Joint Tenants with Rights of Survivorship (JTWROS)
  3. C
    Transfer on Death (TOD) Individual Account
  4. D
    Uniform Transfers to Minors Act (UTMA) Account

Answer

Tenants in Common (TIC)
Tenants in Common (TIC) registration allows each co-owner's interest to be passed to their designated beneficiaries or estate upon death rather than automatically vesting in the surviving joint owner.

Step-by-Step Solution

1
Identify the requested survivorship and estate transfer rules.
The account holders require that a deceased owner's share passes to their estate/will rather than surviving joint owners.
Ownership structures determine asset disposition legal rights upon owner death.
2
Compare joint account ownership registrations.
Tenants in Common (TIC) passes the decedent's share to their estate, whereas Joint Tenants with Rights of Survivorship (JTWROS) passes assets directly to the surviving co-owner.
TIC registration preserves individual estate planning directions.

Key Concept

Distinction between Tenants in Common (TIC) and Joint Tenants with Rights of Survivorship (JTWROS)
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Topics

Customer Account Types and Ownership Structures