Right Of Survivorship

Two sisters hold an account as joint tenants with right of survivorship. One sister deposited every dollar in it and the other contributed nothing. The sister who contributed nothing dies. What does the surviving sister receive?

1. A.The entire account, because survivorship ignores contributionsCorrect. In a survivorship registration the survivor takes the whole account whatever each owner put in.
2. B.Only what she deposited, with the balance going to probateWrong. Deposits are not tracked as separate shares in a survivorship account.
3. C.Half the account, since joint owners are presumed equalWrong. The equal-shares presumption belongs to a tenancy in common, where survivorship does not operate.
4. D.Nothing further, because she already owns what she contributedWrong. She ends up owning the whole account, which is a good deal more than she contributed.

Why: A joint tenancy with right of survivorship gives each owner an undivided interest in the whole account, and on the death of any owner the survivors take the entire interest by operation of the registration, outside probate. Who funded the account creates no separate shares and is not recorded as such by the firm. The result would differ completely in a tenancy in common, where each owner holds a stated fractional interest passing to that owner's estate. Here the deceased sister contributed nothing so the outcome looks unremarkable, but the identical rule would hand the survivor the whole account even had the deceased sister funded all of it.

Marta and her brother Diego hold a joint brokerage account as TENANTS IN COMMON, with Marta owning 60 percent and Diego 40 percent. Marta dies. What happens to her 60 percent interest?

1. A.It passes to her estate and is distributed under her will or state intestacy law; it does not automatically go to Diego.Correct. Tenants in common has no survivorship feature, so the decedent fractional interest flows through the estate.
2. B.It passes automatically to Diego, who becomes the sole owner of the account.That is the result under joint tenants with right of survivorship, which is the other joint registration and not the one described here.
3. C.It is divided evenly between Diego and Marta estate, regardless of the stated percentages.The stated percentages control. Tenants in common allows unequal ownership, and the 60 percent stays 60 percent.
4. D.It is frozen permanently until Diego also dies.The account is restricted pending documentation, but the decedent share is settled to the estate rather than held indefinitely.

Why: Tenants in common is the joint form WITHOUT a right of survivorship. Each owner holds a defined fractional interest that belongs to that owner estate at death. Marta 60 percent passes under her will, or under state intestacy law if she left none, and Diego keeps only his own 40 percent. Review joint account registrations in the customer accounts topic.

A married couple holds an account as joint tenants with right of survivorship, and the registration also carries a transfer on death designation naming their nephew. The husband dies. Who owns the account?

1. A.The nephew, because a death beneficiary designation controlsWrong. The designation is real but has not yet been triggered, because an owner is still alive.
2. B.The wife, because survivorship operates on the first deathCorrect. The transfer on death designation takes effect only when the last surviving owner dies.
3. C.The wife and the nephew equally, since both provisions applyWrong. The two provisions run in sequence rather than at once, so nothing is divided between them.
4. D.The husband's estate, because two conflicting provisions cancelWrong. Competing provisions do not nullify one another and send the account into probate.

Why: Two transfer mechanisms sit on this account and they operate in sequence rather than in competition. Survivorship governs what happens on the death of any owner while another owner remains, moving the deceased owner's interest to the survivor outside probate. The transfer on death designation governs what happens once no owner is left alive, at which point the account passes to the named beneficiary. The wife therefore takes the whole account now, and the nephew's designation stays in place awaiting her death. She could change or remove that designation afterwards, since she would then be the sole owner.