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Getting Started

Getting Started

 - Introduction
 - Picking a Firm
 - Opening an Account
 - Types of Accounts
 - The Importance of Title
 - Placing an Order
 - Order Duration
 - The Entrance Fee





The Importance of Title

The name and title on an account declares ownership, usage, purpose and transfer rights. Don’t underestimate its importance! Many family feuds involve assets rights. Here are the standard choices:

  • Individual – An account with the name of one individual as owner. Upon the death of the owner, the assets pass through probate in accordance with the terms of the owner’s will. If the individual dies with creditors, they can claim the assets.
  • Payable-on-Death Accounts – The P.O.D. designation makes an account an informal trust. The beneficiary will receive the assets in the account, upon the principal’s death. The P.O.D. designation is an easy and inexpensive way of transferring assets, upon death, by avoiding the time and expense of going through probate court. Beneficiaries are not joint owners. The owner still controls the assets in the account without restrictions, and can spend them, change the beneficiary, and use the assets as he or she chooses.  
  • Joint Tenants with Rights of Survivorship – An account owned by two or more persons of legal age. Each owner can authorize transactions on behalf of the other owners. Liabilities on the account are normally joint and several. If one of the joint tenants becomes incapacitated, the remaining ones can still conduct business because of their concurrent ownership rights. Upon the death of one owner, the assets are automatically passed to the surviving owners, with the deceased’s estate having no further interest in the account. Upon the surviving owners presenting a death certificate to the brokerage firm, the deceased owner will be removed from the account. A will does not dictate property distribution. If the deceased has creditors, however, they can claim the deceased’s portion of the account. The joint ownership structure can supersede wills, trusts and premarital agreements.   
  • Tenants in Common - An account owned by two or more persons of legal age with no right of survivorship. Upon the death of an owner, the account, and its assets, passes to the estate of the deceased. The deceased’s assets must pass through probate court and the distribution is dictated by the will. If the owner dies with creditors, they can claim the deceased’s portion of the account. The joint tenant is not a beneficiary. They have ownership rights that can not be taken back.
  • Joint Community Property – Represented by husband and wife accounts, where the owners have equal rights to the assets in the account. These accounts are only available in states that recognize joint community property. Upon the death of one owner, the will dictates the disbursement of assets. Each spouse has ownership of his/her portion of the assets in an account, and can leave them to a beneficiary of choice. There are no rights of survivorship.  
  • Custodial Account for a Minor – Used by custodians to invest on behalf of children who are not of legal age.
  • Corporation or LLC Account – These are accounts where the customer is a corporation or LLC. These types of legal entities are commonly used for asset protection and estate planning. Normally, when corporate accounts are opened, the brokerage firm requires that the corporation’s charter reflects that the corporation is legally empowered to purchase securities. A Board of Director’s resolution will also be needed, authorizing specific officers to conduct transactions on behalf of the corporation.
  • Partnership Account - This is when the customer is operating under a signed partnership agreement.

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