Customer Accounts

Customer Accounts ## Account Ownership Types Understanding how accounts are titled determines what happens to the assets on death and who has authority to make decisions. This is heavily tested on the Series 7. --- ## Joint Tenancy with Right of Survivorship (JTWROS) In a JTWROS account, two or more individuals share ownership equally. The critical feature: right of survivorship. When one co-owner dies, their interest automatically passes to the surviving co-owner(s) -- it does NOT go through the deceased's estate or will. Real-world example: A husband and wife hold a brokerage account as JTWROS. The husband dies. The entire account immediately belongs to the wife, regardless of what the husband's will says. The account bypasses probate entirely. Key features: - All tenants have equal rights to the account - Ownership must be equal (cannot hold 70/30 in JTWROS) - Survivorship overrides the will - Most common for married couples --- ## Tenants in Common (TIC) In a TIC account, two or more individuals share ownership, but each owns a specified percentage interest that can be unequal. When one co-owner dies, their interest passes to their estate (governed by their will or state intestacy laws) -- NOT to the surviving co-owners. Real-world example: Two business partners hold real estate as TIC, with one owning 60% and one owning 40%. When the 60% partner dies, her 60% interest goes to her heirs, not to the surviving partner. Key exam distinction: JTWROS = survivorship (bypasses estate); TIC = goes through estate. All co-owners must authorize transactions in a TIC account unless one has been granted trading authority. --- ## Custodial Accounts: UGMA and UTMA When adults want to gift assets to…