Achievable logoAchievable logo
Series 10
Sign in
Sign up
Purchase
Textbook
Practice exams
Support
How it works
Exam catalog
Mountain with a flag at the peak
Textbook
Introduction
1. Supervision
2. Registrations
3. Client issues
4. Investment products
5. Margin accounts
6. Federal rules and regulations
Wrapping up
Achievable logoAchievable logo
3.3.1.2 Multiple owner accounts
Achievable Series 10
3. Client issues
3.3. Accounts
3.3.1. Account types
Our FINRA Series 10 course is currently in development and is a work-in-progress.

Multiple owner accounts

7 min read
Font
Discuss
Share
Feedback

There are also accounts that have more than one adult owner, and even accounts involving children.

Tenants In Common (TIC/JTIC)

Tenants In Common (TIC) or Joint Tenants In Common (JTIC), are the same thing, and are the base of the joint accounts. Two or more persons open the account together and are named as tenants. Each tenant would have a proportional ownership of the entire account based on their proportional contribution. All tenants are recorded as owners on all securities “FBO Owner 1, Owner 2, Owner 3…”, and similarly, all checks are made payable to all tenants. During the time the account is open, all tenants are able to make trades in the account by their own authority. Effectively, all tenants can do all things, with 1 exception, and that is mail. If all of the tenants agree, only 1 of the tenants needs to receive mail. At least 1 must receive mail; all tenants cannot agree that none gets mail, at least 1 gets mail, but all do not have to if they specifically request not to.

If any tenant dies, the entire account is frozen until the proper legal documents are received. At that point, the proportional ownership of the deceased in the account will be left to the estate, and follow a will or any other legal instructions. The remaining tenants will then be able to transact business in the account again, with the remaining money after the deceased’s section is left to their spouse, children, or whatever.

Joint Tenants in Common with right of survivorship (JTWROS)

Very similar to a TIC, except that when one of the tenants dies, the remaining tenants inherit the money. Unlike a TIC, there is no percentile ownership; everyone owns everyone, everyone owns 100%, and there is no individual ownership. Most often, these are done in marriages, but they do not have to be.

In some cases, people could use these instead of Transfer On Death (TOD). TOD designations simply mean that when the person dies, the account is transferred to the stated person(s). JTWROS accounts if 2 parents add their 2 children, those 2 children are now each 100% owners, and could liquidate the account while the parents are alive. In an account with a TOD designation, the children would not get access until the last parent passes. JTWROS often have TOD on them, but the kids aren’t in the JTWROS; they are in the TOD order.

Joint Tenants by the Entirety (TBE)

Tenants By the Entirety (TBE_ aka Joint Tenants By the Entirety, is similar to the previous two, except it is not available in every state. This time, though, it must be in a marriage between 2 people. This is only 2 people. The primary difference as well is that the 2 people must be in agreement on transactions; they cannot be conducted on only 1 tenants orders, as the previous 2 could.

Community property

Is an account with 2 persons who must be married. Like TBE, not every state has these. In community property states, anything considered community property is equally owned by both parties, regardless of who acquired the property, assets, or income. It would also include individually owned property that became ‘commingled’ with joint property.

Accounts with minors

Uniform Gift to Minors Act account (UGMA accounts) and Uniform Transfers to Minors Act accounts (UTMA accounts)

UGMAs and UTMAs are extremely similar in their function, and for most of the time, there is really 1 primary difference; age of control. These are both types of accounts where money is being gifted, given to a minor. It becomes the minor’s property; the minor owns it. Minors, however, are prohibited from conducting business; they are minors after all, and therefore, not persons by legal definition. So they need a custodian to control and manage the money for them until they reach the age of control. That most often is age of majority, in most states 18. With a UGMA, the age of control is the age of majority in the state of issuance. With a UTMA ,the age of control can be set by the person creating the UTMA account up to the max age set by the state, which could be as high as age 25. Until the age of control, the minor cannot directly access the account.

The custodian is assigned by the person funding the account, and does not have to be the parent. The parents do not have to be involved, but to open the account, the social security number of the child must be known, so likely a guardian would be involved if not the parents directly.

UGMAs and UTMAs, as stated, are the property of the minor, which can bring up 2 unforeseen complications. When applying for financial aid for college, a smaller focus is on the parents’ assets and income, and a much larger focus is on the child’s assets and income. The UGMA/UTMA is the child’s assets, so if college funding is done with UGMAs and UTMAs, it could prevent financial aid, until all of the UGMA/UTMA has been used. The other complication arises if the child sadly dies before attaining age of control. Like with most accounts, the monies would go to the owner’s estate. Most children don’t have estates, so we don’t think of minors having an estate, but you have to remember that most minors don’t actually own property. With a UGMA/UTMA, the minor owns the property, meaning the minor would need a will. Likely, the UGMA/UTMA would have some provision for this unlikely situation.

The custodian is allowed to withdraw money for the benefit of the child; pay for education, pay for medical expenses, and similar expenses. They can also withdraw money to pay the taxes that may be due. The account is directly registered to the social security number of the minor, meaning the minor is the one who owes the taxes. Minors can’t pay taxes, so the custodian pays the taxes, usually by simply pulling it out of the account. Custodians are even allowed to take payment for themselves for services. These have to be monitored; we’ve all heard of child actors whose parents robbed them blind. The “salary” the custodian pulls has to be appropriate to the work. Managing a $25,000 UGMA/UTMA does not require a lot of work, and likely wouldn’t justify compensation for the custodian. Managing a $50 million dollar UGMA/UTMA “trust fund baby” account on the other hand, could be much time and therefore more compensation deserved.

Think of the UGMA that would have been opened for Bruce Wayne. Yes, Batman. He was a child when his parents, extremely wealthy people, were killed. He couldn’t directly inherit, so it would have to be in an UGMA or UTMA type account. Managing that type of account, would likely be basically a full time job, and that custodian deserves to be compensated.

Guardians

Unlikely to be seen, but guardianship entails a legal guardian who can make a wide range of personal, medical, and other day-to-day decisions. In most situations, the biological parents raising the children are the guardians. Adopted parents would also similarly be the guardians until the child turns 18. Depending on needs, adults can also have guardians when dealing with severe mental development problems or dementia related illnesses.

Conservators

Unlikely to be seen, but conservatorship entails a legal conservator who makes much more limited decisions than the guardian. Conservators, which some states combine with guardians, and certainly do when dealing with minors unless otherwise specified, have much more financial control and influence than the guardian’s day-to-day control and influence.

Sign up for free to take 5 quiz questions on this topic

Previous
Next  | 3.3.2 Retirement accounts
All rights reserved ©2016 - 2026 Achievable, Inc.

Multiple owner accounts

There are also accounts that have more than one adult owner, and even accounts involving children.

Tenants In Common (TIC/JTIC)

Tenants In Common (TIC) or Joint Tenants In Common (JTIC), are the same thing, and are the base of the joint accounts. Two or more persons open the account together and are named as tenants. Each tenant would have a proportional ownership of the entire account based on their proportional contribution. All tenants are recorded as owners on all securities “FBO Owner 1, Owner 2, Owner 3…”, and similarly, all checks are made payable to all tenants. During the time the account is open, all tenants are able to make trades in the account by their own authority. Effectively, all tenants can do all things, with 1 exception, and that is mail. If all of the tenants agree, only 1 of the tenants needs to receive mail. At least 1 must receive mail; all tenants cannot agree that none gets mail, at least 1 gets mail, but all do not have to if they specifically request not to.

If any tenant dies, the entire account is frozen until the proper legal documents are received. At that point, the proportional ownership of the deceased in the account will be left to the estate, and follow a will or any other legal instructions. The remaining tenants will then be able to transact business in the account again, with the remaining money after the deceased’s section is left to their spouse, children, or whatever.

Joint Tenants in Common with right of survivorship (JTWROS)

Very similar to a TIC, except that when one of the tenants dies, the remaining tenants inherit the money. Unlike a TIC, there is no percentile ownership; everyone owns everyone, everyone owns 100%, and there is no individual ownership. Most often, these are done in marriages, but they do not have to be.

In some cases, people could use these instead of Transfer On Death (TOD). TOD designations simply mean that when the person dies, the account is transferred to the stated person(s). JTWROS accounts if 2 parents add their 2 children, those 2 children are now each 100% owners, and could liquidate the account while the parents are alive. In an account with a TOD designation, the children would not get access until the last parent passes. JTWROS often have TOD on them, but the kids aren’t in the JTWROS; they are in the TOD order.

Joint Tenants by the Entirety (TBE)

Tenants By the Entirety (TBE_ aka Joint Tenants By the Entirety, is similar to the previous two, except it is not available in every state. This time, though, it must be in a marriage between 2 people. This is only 2 people. The primary difference as well is that the 2 people must be in agreement on transactions; they cannot be conducted on only 1 tenants orders, as the previous 2 could.

Community property

Is an account with 2 persons who must be married. Like TBE, not every state has these. In community property states, anything considered community property is equally owned by both parties, regardless of who acquired the property, assets, or income. It would also include individually owned property that became ‘commingled’ with joint property.

Accounts with minors

Uniform Gift to Minors Act account (UGMA accounts) and Uniform Transfers to Minors Act accounts (UTMA accounts)

UGMAs and UTMAs are extremely similar in their function, and for most of the time, there is really 1 primary difference; age of control. These are both types of accounts where money is being gifted, given to a minor. It becomes the minor’s property; the minor owns it. Minors, however, are prohibited from conducting business; they are minors after all, and therefore, not persons by legal definition. So they need a custodian to control and manage the money for them until they reach the age of control. That most often is age of majority, in most states 18. With a UGMA, the age of control is the age of majority in the state of issuance. With a UTMA ,the age of control can be set by the person creating the UTMA account up to the max age set by the state, which could be as high as age 25. Until the age of control, the minor cannot directly access the account.

The custodian is assigned by the person funding the account, and does not have to be the parent. The parents do not have to be involved, but to open the account, the social security number of the child must be known, so likely a guardian would be involved if not the parents directly.

UGMAs and UTMAs, as stated, are the property of the minor, which can bring up 2 unforeseen complications. When applying for financial aid for college, a smaller focus is on the parents’ assets and income, and a much larger focus is on the child’s assets and income. The UGMA/UTMA is the child’s assets, so if college funding is done with UGMAs and UTMAs, it could prevent financial aid, until all of the UGMA/UTMA has been used. The other complication arises if the child sadly dies before attaining age of control. Like with most accounts, the monies would go to the owner’s estate. Most children don’t have estates, so we don’t think of minors having an estate, but you have to remember that most minors don’t actually own property. With a UGMA/UTMA, the minor owns the property, meaning the minor would need a will. Likely, the UGMA/UTMA would have some provision for this unlikely situation.

The custodian is allowed to withdraw money for the benefit of the child; pay for education, pay for medical expenses, and similar expenses. They can also withdraw money to pay the taxes that may be due. The account is directly registered to the social security number of the minor, meaning the minor is the one who owes the taxes. Minors can’t pay taxes, so the custodian pays the taxes, usually by simply pulling it out of the account. Custodians are even allowed to take payment for themselves for services. These have to be monitored; we’ve all heard of child actors whose parents robbed them blind. The “salary” the custodian pulls has to be appropriate to the work. Managing a $25,000 UGMA/UTMA does not require a lot of work, and likely wouldn’t justify compensation for the custodian. Managing a $50 million dollar UGMA/UTMA “trust fund baby” account on the other hand, could be much time and therefore more compensation deserved.

Think of the UGMA that would have been opened for Bruce Wayne. Yes, Batman. He was a child when his parents, extremely wealthy people, were killed. He couldn’t directly inherit, so it would have to be in an UGMA or UTMA type account. Managing that type of account, would likely be basically a full time job, and that custodian deserves to be compensated.

Guardians

Unlikely to be seen, but guardianship entails a legal guardian who can make a wide range of personal, medical, and other day-to-day decisions. In most situations, the biological parents raising the children are the guardians. Adopted parents would also similarly be the guardians until the child turns 18. Depending on needs, adults can also have guardians when dealing with severe mental development problems or dementia related illnesses.

Conservators

Unlikely to be seen, but conservatorship entails a legal conservator who makes much more limited decisions than the guardian. Conservators, which some states combine with guardians, and certainly do when dealing with minors unless otherwise specified, have much more financial control and influence than the guardian’s day-to-day control and influence.

More from Account types

  • Single owner accounts