Examkin

Question

Difficulty: EasyCustomer Account Types and Ownership Structures

Two siblings, Rachel and Mark, establish a joint brokerage account registered as Tenants in Common (TIC). If Mark passes away, what happens to his portion of the account assets?

  1. His portion passes to his estate and is distributed according to his will or state law.Answer
  2. B
    His portion automatically transfers to Rachel as the surviving joint owner.
  3. C
    His portion is immediately surrendered to FINRA for regulatory oversight.
  4. D
    His portion is transferred to SIPC to insure the remaining funds.

Answer

In a Tenants in Common (TIC) account, the deceased tenant's share of the account assets passes to their estate rather than automatically transferring to the surviving joint owner.
In a Tenants in Common (TIC) account structure, each owner retains a distinct ownership percentage in the assets. Upon the death of a tenant, their interest in the account does not pass to the surviving tenant(s); instead, it passes to the decedent's estate to be distributed in accordance with their legal will or applicable probate laws.

Step-by-Step Solution

1
Identify the account ownership structure specified in the scenario.
The account is registered as Tenants in Common (TIC).
Account ownership type dictates the legal transfer of assets upon owner death.
2
Apply the rule of survivorship specific to Tenants in Common (TIC) accounts.
TIC accounts do not carry rights of survivorship.
Unlike JTWROS, TIC ownership mandates that a deceased owner's share becomes part of their estate.

Key Concept

Tenants in Common (TIC) vs. Joint Tenants with Rights of Survivorship (JTWROS)
Rate this question

Topics

Customer Account Types and Ownership Structures