FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationOpening and Maintaining Customer Accounts and Investment RecommendationsMedium
A client opens a joint account with rights of survivorship (JTWROS) with their spouse. If one spouse passes away, what happens to the assets in the account?
- AThe deceased spouse's share is distributed to their estate.
- BThe assets are split equally between the surviving spouse and the deceased's beneficiaries.
- CThe account is frozen until a court determines asset distribution.
- DThe surviving spouse becomes the sole owner of all assets.
Show answer & explanationAnswer & explanation
Correct answer: D. The surviving spouse becomes the sole owner of all assets.
In a Joint Tenancy With Rights Of Survivorship (JTWROS) account, if one account holder dies, their interest in the account automatically passes to the surviving account holder(s), bypassing probate. The surviving spouse becomes the sole owner.
Why the other options are wrong
- A. This describes a Tenancy in Common (TIC) account, not JTWROS.
- B. This is incorrect; the surviving spouse receives all assets, not a split with beneficiaries.
- C. Accounts may be temporarily frozen for administrative purposes, but the distribution method is predetermined by the JTWROS designation, not court determination.
JTWROS Account
A joint account where each owner has an undivided interest in the entire account, and upon the death of one owner, their interest automatically passes to the surviving owner(s).
- Assets bypass probate.
- Surviving owner becomes sole owner.
- Common between spouses.
Memory trick: JTWROS: Joint Takes Whole, Right Of Survivor.