Joint Accounts: JTWROS vs. Tenants in Common (TIC) Upon Death
Two business partners, Alan and Brian, open a joint brokerage account funded with $500,000. Alan contributes $350,000 (70%) and Brian contributes $150,000 (30%). If the account is titled as Tenants in Common (TIC) and Alan dies unexpectedly, what happens to Alan's share of the account assets?
In a Tenants in Common (TIC) account, a deceased tenant's specific ownership percentage passes to their estate, NOT to the surviving tenant.
Complete Analysis & Legal Rationale
In a Tenants in Common (TIC) account, owners can hold unequal ownership percentages (such as 70% and 30%). Upon the death of one tenant, that deceased tenant's fractional interest does NOT pass to the surviving tenant; rather, it belongs to the decedent's estate and passes through probate to heirs. In contrast, in a Joint Tenants with Rights of Survivorship (JTWROS) account, the deceased party's interest automatically passes to the surviving tenant(s) by operation of law, bypassing probate.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Describes Joint Tenants with Rights of Survivorship (JTWROS), not Tenants in Common (TIC).
TIC ownership shares remain property of the deceased owner's estate upon death.
Escheatment occurs only when assets remain unclaimed with no identifiable heirs or legal representatives.
TIC does not mandate immediate liquidation or equal 50/50 division; ownership percentages are preserved.
Official Standard: Distinguishes between Joint Tenants with Rights of Survivorship and Tenants in Common estate pass-through mechanics.