Who is JTWROS and Why are They Listed on My Account Statement?

Answer 1

Oftentimes account statements you receive from your bank or brokerage may have the abbreviation JTWROS on them. What does this strange string of letters mean to you?

Often shown in its abbreviated format, JTWROS, or Joint Tenants with Right of Survivorship is a legal way to hold real property in which ownership is shared by two or more people. Each party, called a joint tenant, enjoys equal rights to the property. That's what the joint tenants part of JTWROS means.

Joint Tenants with Right of Survivorship can be used in the case of unmarried or married couples. Some assets that are typically held by way of JTWROS include primary residences and bank or brokerage accounts. Sometimes business partners will hold their business property as Joint Tenants with Right of Survivorship.

What happens when one of the joint tenants dies? That's where the right of survivorship comes into play. Upon the death of one of the joint tenants, the ownership of property passes directly to the other joint tenant(s), regardless of any conflicting instructions for distribution of that property in the decedent's will. So using Joint Tenants with Right of Survivorship to hold property keeps the property out of the estate of a deceased joint tenant, though estate and/or gift taxes may apply.

But make sure you understand this point; liabilities attached to a property held Joint Tenants with Right of Survivorship (like a mortgage on a home) continue to be attached to that property and become the responsibility of the surviving joint tenants. Unless ownership is reregistered differently, property held Joint Tenants with Right of Survivorship passes to the estate of the last surviving joint tenant.

So the next time you see these letters listed somewhere you'll know what they mean and if someone asks you how you want to register the ownership of an account you may be a little bit more prepared.