FINRA Series 7Opens Accounts and Evaluates Customer ProfileMedium
Mr. and Mrs. Chen hold a brokerage account registered as joint tenants with rights of survivorship (JTWROS). Mr. Chen passes away. What happens to his interest in the account?
- AThe account is frozen until a probate court determines the rightful heir
- BHis interest is split equally between Mrs. Chen and any named beneficiaries on his will
- CHis interest passes to his estate and is distributed according to his will
- DHis interest automatically passes to Mrs. Chen, and she becomes the sole owner of the entire account
Show answer & explanationAnswer & explanation
Correct answer: D. His interest automatically passes to Mrs. Chen, and she becomes the sole owner of the entire account
JTWROS registration includes a right of survivorship, meaning a deceased owner's interest passes automatically and directly to the surviving joint owner(s), bypassing probate and the decedent's will entirely.
Why the other options are wrong
- A. No probate freeze is needed because survivorship passes title automatically.
- B. The will has no bearing on JTWROS assets; the surviving owner receives the entire interest.
- C. JTWROS specifically avoids probate/estate distribution due to the survivorship feature.
JTWROS (Joint Tenants with Rights of Survivorship)
A joint account registration in which a deceased owner's interest automatically transfers to the surviving owner(s), avoiding probate.
- Bypasses the decedent's will and probate
- Common for spouses
- Contrast with Tenants in Common (TIC), where a deceased owner's share passes to their estate
Memory trick: JTWROS: 'Winner takes all' — survivor gets it, no will involved.