What Type of Account Registration is Right for You?

April 10, 2016
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One of the first questions your advisor will ask you is, “How do you want to register your account?” Some accounts are obvious and don’t have an option like a trust or retirement account. However, when you open an individual or joint owned investment you do have options and the title of your property can have consequences in the case of death, divorce, or creditors. The following are the options, explanations, and possible implications for account types:


The individual owner of this account has absolute rights. They can gift, sell, withdraw, or pledge the funds in the account. At death, 100% of the account is included in the decedent’s gross estate and is subject to probate.


Tenancy in Common

With joint ownership, two or more persons hold a percentage share of the account assets. When one of the tenants die, the survivor does not automatically receive the decedent’s interest and will usually be subject to probate. Each tenant can pass their interest in the account through their will.

Joint Tenancy with Right of Survivorship (JTWROS)

Two or more persons have an equal interest in the account and right of survivorship regardless of the amount contributed. The death of one person can avoid probate since their interest will pass to the remaining Joint Tenant(s).

This can be used by long-term partners or married couples who want the account transferred immediately to the survivor. However, a consideration when opening a JTWROS account with a non-spouse is that a gift may occur if all owners do not contribute equally to the account. The ownership percentage of a JTWROS account is divided equally between the owners regardless of the amount each person contributes. A gift, which is eligible for the annual exclusion, is created once the non-contributing party withdraws funds for their own benefit.

Joint Tenancy by the Entirety

This is a special form of Joint Tenancy that is only available to spouses and is recognized in Florida but not all states. In this type of ownership, one spouse cannot sever their ownership rights without the consent of the other spouse, providing greater creditor protection than a regular JTWROS.


Ownership remains with the account holder during their lifetime and the account holder names beneficiaries. At death, the assets are transferred to the beneficiaries and avoid probate.

There are a number of things you should consider before making a decision on the way you title your account(s). Your financial advisor can answer any questions and provide additional details on these different types of accounts. Please be sure to also consult your attorney or accountant when making your decision.