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Question

Difficulty: EasyCustomer Account Types and Ownership Structures

Match each customer account ownership structure to its defining legal or operational attribute.

  • Joint Tenants with Rights of Survivorship (JTWROS)Upon an owner's death, their asset interest automatically passes to the surviving account owner(s) outside of probate.
  • Tenants in Common (TIC)Upon an owner's death, their fractional interest passes to their estate rather than the surviving owner(s).
  • Corporate AccountRequires a corporate resolution to verify which individuals are authorized to trade on behalf of the entity.
  • UGMA/UTMA Custodial AccountIrrevocable account established for the benefit of one minor, managed by one adult custodian.

Answer

Joint Tenants with Rights of Survivorship (JTWROS) matches automatically passing assets to surviving owners outside of probate; Tenants in Common (TIC) matches passing fractional interest to the deceased owner's estate; Corporate Account matches requiring a corporate resolution to designate authorized traders; UGMA/UTMA Custodial Account matches an irrevocable account for one minor managed by one custodian.
Each ownership structure carries distinct legal rights and documentation standards: JTWROS provides right of survivorship to remaining owners; TIC directs deceased owners' shares to their estate; Corporate accounts mandate corporate resolutions to establish authorized agents; and UGMA/UTMA accounts create irrevocable custodial setups for a single minor.

Step-by-Step Solution

1
Identify the survivorship rules for joint accounts.
JTWROS transfers assets directly to surviving owners, whereas TIC routes the deceased owner's percentage share to their estate.
Survivorship rights are the key operational distinction between JTWROS and TIC joint accounts.
2
Identify documentation requirements for institutional/entity accounts.
A corporate account requires a corporate resolution to legally confirm trading authorization for individuals.
Broker-dealers must establish authorized officers via board documentation before executing trades for a corporation.
3
Identify legal structures of fiduciary custodial accounts.
UGMA/UTMA accounts are irrevocable custodial accounts strictly limited to one minor beneficiary and one custodian.
UGMA/UTMA accounts transfer legal ownership to the minor under custodial oversight until reaching the age of majority.

Key Concept

Customer Account Types and Ownership Structures
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Customer Account Types and Ownership Structures