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Question

Difficulty: EasyCustomer Account Types and Ownership Structures

Two adult siblings open a joint brokerage account registered as Joint Tenants with Rights of Survivorship (JTWROS). If one sibling passes away, what happens to the ownership of the assets in the account?

  1. The deceased owner's share passes directly to the surviving owner without passing through probate.Answer
  2. B
    The deceased owner's share passes to their estate and must be distributed through probate.
  3. C
    The account is frozen permanently until all assets are liquidated by court order.
  4. D
    The account automatically converts into a custodial account under the Uniform Transfers to Minors Act (UTMA).

Answer

The deceased owner's share passes directly to the surviving owner without passing through probate.
In a Joint Tenants with Rights of Survivorship (JTWROS) account, all owners hold an undivided interest in the assets. Upon the death of one owner, their interest automatically passes to the surviving owner outside of probate.

Step-by-Step Solution

1
Identify the account registration type.
The account is registered as Joint Tenants with Rights of Survivorship (JTWROS).
Account registration dictates how asset ownership transfers upon the death of an account holder.
2
Apply survivorship rules for JTWROS accounts.
The surviving owner automatically inherits the deceased owner's interest.
Rights of survivorship bypass the deceased individual's estate and probate.

Key Concept

Rights of Survivorship in JTWROS Accounts
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Topics

Customer Account Types and Ownership Structures