3.1 - didn't know

Question 1

Three brothers open a joint account instructing you that, if they die, they want the cash and securities in the account to go to the remaining parties to the account. The account should be opened

Answer 1

with rights of survivorship.

Under joint tenants with right of survivorship, each brother’s interest in the account would go to the surviving brother. Although JTWROS accounts may be opened with a TOD designation, that is not the best answer to this question—that is a feature that would be added to the account. From time to time, you will see questions on the exam where it will be a challenge to choose between two “good-looking” answers. The key is to pick the one that is the most appropriate to the specific question.

Question 2

Information received from a customer upon opening a new account must be confirmed with the customer when?

Answer 2

Within 30 days of account opening

This information must be confirmed within 30 days of the account opening. The confirmation often takes the form of a negative confirmation letter, requesting the customer to respond if something is incorrect.

Question 3

All of the following statements about joint tenants with rights of survivorship are true except

A)
trades may be made by either party.

B)
in the event of death, the remaining tenant has full ownership of the account.

C)
mail can be sent to either of the parties to the account.

D)
checks can be made out to either party.

Answer 3

checks can be made out to either party.

In a joint account, checks must be made out to all parties to the account; either party may make trades or receive mail regarding the account.

Question 4

A client and her spouse own shares in the ACE Fund as tenants in common. She has a 60% ownership interest in the account and her spouse has the balance. If the client dies, what happens to the shares in the account?

Answer 4

Forty percent of the shares would belong to her spouse and the remaining balance would be distributed to her estate.

In a TIC account, securities pass to the deceased owner’s estate. Unlike JTWROS, the percentages don’t have to be equal.