Joint Tenants with Rights of Survivorship (JTWROS)

B is correct. Joint Tenants with Rights of Survivorship (JTWROS) provides automatic transfer to the surviving owner upon death of either party, avoiding probate. This exactly matches the couple's stated goals. Both parties have equal ownership rights and full survivorship rights.

A is incorrect because Tenants in Common (TIC) does NOT provide automatic survivorship. In a TIC account, each owner's share passes to their estate or designated beneficiaries through their will, not automatically to the other account owner. This would require probate. C is incorrect because TOD (Transfer on Death) designations are used on individual accounts to name beneficiaries, not for joint accounts with automatic survivorship. TOD avoids probate but is a different mechanism. D is incorrect because a power of attorney terminates at death and cannot transfer ownership. The power of attorney would become invalid exactly when needed (at death), and the account would go through probate.

B is correct. In JTWROS accounts, each owner legally owns 100% of the account with full survivorship rights. This is the defining characteristic of joint tenancy. When one owner dies, the surviving owner(s) automatically retain 100% ownership because they already owned the whole account. The deceased owner's "interest" does not pass to their estate; it simply ceases to exist.

A is incorrect because JTWROS ownership is NOT based on contribution percentages. Unlike Tenants in Common (where ownership can be proportional), JTWROS requires equal ownership rights regardless of who contributed what. B is incorrect because it describes Tenants in Common (TIC), not JTWROS. In TIC, each owner has a divisible percentage that passes to their estate or beneficiaries upon death. D is incorrect because JTWROS ownership structure is consistent across jurisdictions: equal ownership with survivorship rights. State law variations exist for other aspects (e.g., creditor claims), but not the fundamental ownership structure.

B is correct. For estate tax purposes, the deceased joint tenant's proportional share is included in their taxable estate. In a typical two-person JTWROS account, this is 50% of the account value, or $200,000 in this case. JTWROS avoids probate (the legal process of validating a will and distributing assets), but it does NOT avoid estate taxes. The IRS includes the deceased owner's share in their gross estate for estate tax calculation.

A is incorrect and reflects a common misconception. JTWROS avoids probate but NOT estate taxes. The deceased owner's share is included in their taxable estate. The probate process and estate tax calculation are separate: probate determines how assets are distributed, while estate tax applies to the total value of the estate regardless of how it transfers. C is incorrect because only the deceased owner's proportional share (not the full account) is included in their estate. The surviving owner's share was already theirs and is not included in the deceased's estate. D is partially correct in that contribution can matter for estate tax purposes, but the standard presumption is equal ownership (50/50) unless proven otherwise with documentation of unequal contributions.

C is correct (the EXCEPT answer). JTWROS accounts do NOT exclude assets from the deceased owner's taxable estate. The deceased owner's proportional share (typically 50% in a two-person account) is included in their gross estate for estate tax purposes. JTWROS provides probate avoidance, not estate tax avoidance. This is the most common misconception about JTWROS accounts.

A is accurate: Automatic survivorship is the defining feature of JTWROS. When one owner dies, the surviving owner(s) automatically become the sole owner(s) without the account going through probate or the deceased owner's will. The transfer is immediate and automatic by operation of law. B is accurate: All joint tenants must approve transactions in a JTWROS account. This unanimous consent requirement applies to trades, withdrawals, and account changes. This distinguishes JTWROS from accounts with limited trading authorization. D is accurate: JTWROS accounts bypass probate entirely. Because the account is owned jointly with survivorship rights, it does not become part of the deceased owner's probate estate. The surviving owner(s) can immediately access and control the account.

B is correct. Only statements 2 and 4 are accurate.

Statement 1 is FALSE: Although each owner technically owns 100% with survivorship rights, this does NOT mean either owner can unilaterally withdraw funds. JTWROS accounts require unanimous consent for all transactions, including withdrawals. Both Emily and Robert must approve the $100,000 withdrawal. The 100% ownership concept refers to survivorship rights, not transaction authority.

Statement 2 is TRUE: All joint tenants in a JTWROS account must approve transactions. This unanimous consent requirement protects all owners and prevents one owner from unilaterally depleting the account. Emily cannot withdraw $100,000 without Robert's explicit approval.

Statement 3 is FALSE: This describes Tenants in Common (TIC), not JTWROS. In JTWROS, the deceased owner's interest does not pass through their will or to their estate. The survivorship feature overrides will provisions. Emily's share would automatically pass to Robert, not to her children, regardless of what her will says.

Statement 4 is TRUE: This is the defining feature of JTWROS. Upon Emily's death, Robert would automatically become the sole owner of the entire $600,000 account through the right of survivorship. The account would not go through probate, and Emily's will would have no effect on the account ownership. The transfer is immediate and automatic.