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Question

Difficulty: EasyCustomer Account Types and Ownership Structures

A mother and her adult son open a joint brokerage account designated as Joint Tenants with Rights of Survivorship (JTWROS). If the mother passes away, which of the following statements correctly describes the legal disposition of the account assets?

  1. The surviving son automatically becomes the sole owner of all account assets without the assets going through probate.Answer
  2. B
    The mother's share of the account assets must pass to her estate and be distributed through probate according to her will.
  3. C
    The account assets are frozen and transferred to SIPC for liquidation and equal distribution among heirs.
  4. D
    The account automatically converts into a discretionary account managed by the firm until probate court issues approval.

Answer

The surviving son automatically becomes the sole owner of all account assets without the assets going through probate.
In a Joint Tenants with Rights of Survivorship (JTWROS) account, when one account owner dies, the deceased owner's interest in the account automatically passes to the surviving account owner(s). The assets do not pass into the deceased owner's estate and do not go through probate.

Step-by-Step Solution

1
Identify the account registration type.
The account is registered as Joint Tenants with Rights of Survivorship (JTWROS).
Account ownership designation governs the legal disposition of assets upon the death of an owner.
2
Apply the survivorship rule for JTWROS accounts.
Under JTWROS, rights of survivorship mean the deceased tenant's interest transfers directly to the surviving tenant(s).
JTWROS bypasses probate court proceedings, unlike a Tenants in Common (TIC) registration.

Key Concept

Joint Tenants with Rights of Survivorship (JTWROS) Survivorship Provisions
Estimated Time:45s
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Topics

Customer Account Types and Ownership Structures