An account established as Joint Tenants with Rights of Survivorship / JTWROS is a joint account where the assets of a party who has died transfers to the surviving party, and not the decedent’s estate. As with any joint account either party may enter an order for the account, and all payments must be made out in the names of both parties. The assets in the account are automatically transferred and do not pass through the probate process.
Often times when a husband and wife have a joint account, the parties will want the surviving spouse to receive the ownership of the account in the event of the death of one party. Should one spouse die, the assets in the account will be re-titled into the name of the sole surviving party. Once the assets are re-titled, the account will become an individual account. Accounts established as JTWROS are deemed to be community property, that is property owned equally by both parties i.e 50/50 ownership. Older parents, sometimes mistakenly, have an account with a child to whom they want their assets to pass in the event of death. This can cause an issue should the adult child become subject to a lawsuit, such as a divorce proceeding. In these instances the assets could be attacked by the party bringing the suit. Almost all FINRA and NASAA exams require students to have a full and complete understanding of the account establishment process as well as handling customer accounts. Get ready to ACE your exam with our Greenlight money back pass guarantee.
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