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Question

Difficulty: EasyCustomer Account Types and Ownership Structures

A married couple maintains a joint brokerage account designated as Joint Tenants with Rights of Survivorship (JTWROS). Upon the unexpected death of one spouse, what happens to the ownership of the assets held in the account?

  1. The entire ownership of the account assets passes directly to the surviving spouse without going through probate.Answer
  2. B
    The deceased spouse's portion of assets must pass to their estate and be distributed according to their will through probate.
  3. C
    The broker-dealer must liquidate all securities in the account immediately and hold the cash balance in escrow.
  4. D
    The account assets must be divided equally among all surviving adult children of the deceased spouse.

Answer

The entire ownership of the account assets passes directly to the surviving spouse without going through probate.
In a Joint Tenants with Rights of Survivorship (JTWROS) account structure, all named tenants have an undivided interest in the account. Upon the death of one joint owner, ownership of the account assets automatically passes to the surviving owner by operation of law, bypassing the probate court process.

Step-by-Step Solution

1
Identify the account registration type.
The account is registered as Joint Tenants with Rights of Survivorship (JTWROS).
The ownership structure determines how rights to account assets are handled upon an owner's death.
2
Apply the legal rule of survivorship rights to JTWROS accounts.
Assets automatically belong to the surviving owner(s) outside of probate proceedings.
JTWROS accounts stipulate that upon the death of one owner, full ownership bypasses the estate and transfers directly to the surviving tenant.

Key Concept

Rights of Survivorship in JTWROS Accounts
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Topics

Customer Account Types and Ownership Structures