Examkin

Question

Difficulty: EasyCustomer Account Types and Ownership Structures

Two investors establish a joint brokerage account designated as Joint Tenants with Rights of Survivorship (JTWROS). If one of the joint owners passes away, what happens to the assets in the account?

  1. 100% of the account assets automatically pass to the surviving owner without going through probate.Answer
  2. B
    The deceased owner's share of the account assets passes to their estate and must be distributed according to their will.
  3. C
    The broker-dealer must place a temporary hold on all account disbursements until a legal executor liquidates the securities.
  4. D
    SIPC takes custody of the deceased owner's portion of the securities to reallocate coverage limits.

Answer

100% of the account assets automatically pass to the surviving owner without going through probate.
In a Joint Tenants with Rights of Survivorship (JTWROS) account, all joint owners have an undivided equal interest in the account. Upon the death of any owner, their ownership interest automatically transfers to the surviving owner(s) outside of probate.

Step-by-Step Solution

1
Identify the account registration structure given in the scenario.
The account is registered as Joint Tenants with Rights of Survivorship (JTWROS).
The ownership structure dictates how assets are handled upon the death of one of the owners.
2
Apply the legal characteristic of survivorship rights in a JTWROS account.
Upon the death of one owner, all assets automatically transfer to the surviving joint owner, bypassing the probate court process.
This is the primary defining feature of JTWROS accounts compared to Tenants in Common (TIC) accounts.

Key Concept

Rights of Survivorship in JTWROS Accounts
Rate this question

Topics

Customer Account Types and Ownership Structures