3.5 Account Ownership Registrations
Proper account titling establishes legal ownership, trading authority, and estate disposition rules.
Key FINRA Exam Takeaways
- Individual: One beneficial owner.
- Joint Tenants with Right of Survivorship (JTWROS): Equal ownership; interest passes directly to surviving owner, bypassing probate.
- Tenants in Common (TIC): Fractional ownership (e.g. 60/40); deceased tenant's share passes to their estate/heirs.
- Custodial (UGMA/UTMA): 1 adult custodian, 1 minor; irrevocable gift; cannot trade on margin.
- Corporate Account: Requires corporate resolution naming authorized traders and corporate charter.
Knowledge Checkpoint • Section 3.5
Two siblings open a joint brokerage account where they want each person's share of the account to pass to their respective children upon death. Which account type must they select?