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👥 Customer Accounts · Lesson 3 of 8 · 5 min

Individual and Joint Accounts: Who Gets It When Someone Dies

💍 Two friends open a joint account. One dies. Does the survivor own everything, or does a stranger's estate become a co-owner?

💡 Key idea

JTWROS: survivor owns all. TIC: the deceased's percentage goes to their estate. TOD: a named beneficiary receives the assets outside probate.

🧠 Why it matters

An INDIVIDUAL account has one owner. JOINT accounts have two or more, and any owner may trade, but checks are made payable to all owners. JTWROS (joint tenants with right of survivorship): owners hold equal, undivided interests, and when one dies the survivor(s) own the whole account, outside probate. TENANTS IN COMMON (TIC): owners may hold unequal shares, and a deceased owner's share goes to that person's estate, not to the other owner. Memory hook: JTWROS = 'survivor takes it'; TIC = 'the share travels to the estate.' TRANSFER ON DEATH (TOD) lets an individual name a beneficiary who receives the assets at death without probate. COMMUNITY PROPERTY, recognized in a minority of states, treats most property acquired during marriage as owned by both spouses.

📈 In the real world

🏠 Ana and Luis, fictional business partners, own a TIC account 70/30. Luis dies. His 30% does not pass to Ana; it goes to his estate, and his will leaves it to his daughter. The firm freezes Luis's portion until it receives the estate documents.

📌 Takeaways

  • Any joint owner may trade; disbursements are payable to all owners
  • JTWROS = equal interests and survivorship; TIC = shares may be unequal and pass to the estate
  • TOD names a beneficiary and avoids probate

📖 Terms in this lesson

Joint tenants with right of survivorship: A joint account in which a deceased owner's share passes to the surviving owners, not to the estate.

Tenants in common: A joint account in which each owner holds a set share that goes to that owner's estate on death.

Transfer on death (TOD): An individual account that passes directly to named beneficiaries at death, avoiding probate.

SURVIVOR TAKES ALL, COMMON GOES HOME: JTWROS: the survivor takes the whole account. Tenants in common: each share goes home to the owner's estate.

✅ Test yourself

In a JTWROS account, one of two owners dies. Who owns the assets?
  1. The deceased owner's estate
  2. Each estate, half apiece
  3. The surviving owner
  4. The broker-dealer, until probate

Answer: C · The surviving owner

Right of survivorship means the surviving joint tenant owns the entire account. The estate would receive a share only under tenants in common.

Which account form allows owners to hold unequal percentages?
  1. JTWROS
  2. Tenants in common
  3. Individual with TOD
  4. Custodial UTMA

Answer: B · Tenants in common

Tenants in common may own, for example, 60/40. JTWROS owners hold equal, undivided interests; individual and UTMA accounts have a single owner.

A joint account owner asks for a withdrawal check. How is it made payable?
  1. To the first-named owner
  2. To the primary residence
  3. To all account owners
  4. To the owner who asked

Answer: C · To all account owners

Any owner may give trading instructions, but disbursements from a joint account are made payable to all owners. Paying only the requesting owner could let one owner take the others' assets.

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