What is a JGBRS account?
A JGBRS, or Joint Gift of Beneficial Right of Survivorship account, is a joint account where the account holder has ownership of the account during their lifetime and gifts the account and its assets to a named successor after their death.
What does account ownership entail?
Like other joint account types, a JGBRS has multiple account holders:
Main account holder
The main account holder has legal and beneficial ownership of the account during their lifetime. They have full control over the account and its assets and can make decisions on the account, like giving instructions, making trades, and withdrawing assets.
Successor account holder(s)
After the death of the main account holder, the account and its assets automatically pass directly to the named successor, generally without probate. While the main account holder is alive, the successor doesn’t have access to the account or its information, unless they have legal authority through a POA or Trading Authority.
What are the potential benefits?
One of the main advantages of a JGBRS is that it allows for a seamless transfer of ownership. It ensures that the account and its assets are efficiently passed on to an intended beneficiary. Some other potential benefits include:
Account control: With a JGBRS, the account holder maintains control of the account and assets in it during their lifetime. Only they can give instructions about trades and withdrawals.
Tax treatment: Since ownership of the account and assets remains with the account holder, there should be no taxable disposition when the account is opened.
Probate fees: Since assets transfer directly to successors once the account holder passes, probate is generally not required.
Creditor protection: A JGBRS might offer protection from the successor’s creditors during the account holder’s lifetime, as the successor does not have beneficial ownership of the assets.
What are some of the drawbacks?
Estate taxes: The JGBRS assets are not available to the deceased accountholder’s executor to pay any taxes or debts owing by the estate.
Equal split: Successor accountholders may only receive equal shares of the account on the accountholder’s death.
Only living successor accountholders inherit: Assets in the account only pass to successor accountholder(s) living on accountholder’s death. Heirs of predeceased successor accountholder have no entitlement.
For more information on all joint ownership accounts, see the link below.
If you have any questions about whether this account is right for you, please feel free to Contact us