Tenancy by Entirety in a Brokerage- How does it work?

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chambers136
Posts: 205
Joined: Tue Feb 28, 2017 9:49 am

Tenancy by Entirety in a Brokerage- How does it work?

Post by chambers136 » Wed Apr 17, 2019 9:55 am

I've been wanting to change the brokerage account held jointly with my wife at Schwab to Tenancy by Entirety (we are in a state that allow this). Reading about it on Investopedia.com (https://www.investopedia.com/terms/t/te ... tirety.asp), it says:

"The condition of mutual ownership of the entire property means the spouses must be in agreement when making decisions about the property. One spouse could not sell off or develop part of or the entire property without their spouse’s consent."

So, I'm the only one who does anything with this account, such as adding money (from a joint account) and buying and selling mutual funds/ETFs. Does the Tenancy by Entirety impact the ability for me to manage this, or is there some sort of complication where we both have to log in to approve trades, withdraws, etc?

megabad
Posts: 1356
Joined: Fri Jun 01, 2018 4:00 pm

Re: Tenancy by Entirety in a Brokerage- How does it work?

Post by megabad » Wed Apr 17, 2019 1:16 pm

chambers136 wrote:
Wed Apr 17, 2019 9:55 am
I've been wanting to change the brokerage account held jointly with my wife at Schwab to Tenancy by Entirety (we are in a state that allow this). Reading about it on Investopedia.com (https://www.investopedia.com/terms/t/te ... tirety.asp), it says:

"The condition of mutual ownership of the entire property means the spouses must be in agreement when making decisions about the property. One spouse could not sell off or develop part of or the entire property without their spouse’s consent."

So, I'm the only one who does anything with this account, such as adding money (from a joint account) and buying and selling mutual funds/ETFs. Does the Tenancy by Entirety impact the ability for me to manage this, or is there some sort of complication where we both have to log in to approve trades, withdraws, etc?
At my brokerages, the actual interface with the website is no different with Tenancy by Entirety accounts and solo account. There is no "special approval process" for trades or anything like that. Of course, if you don't actuate a Tenancy by Entirety account properly, it can lose its status as a Tenancy by Entirety account (see applicable court cases)... so technically, both parties need to understand the implications of the account type, be aware of all transactions, and universally approve all activity...forever. The creditor protections can be very shaky and are obviously dependent on the whim of the courts. Think just like a prenup, when they are perfectly written and executed, they work...sometimes.

[not a lawyer, not legal advice, blah blah]

Topic Author
chambers136
Posts: 205
Joined: Tue Feb 28, 2017 9:49 am

Re: Tenancy by Entirety in a Brokerage- How does it work?

Post by chambers136 » Wed Apr 17, 2019 8:08 pm

Thanks. I have read some of the issues with changing an existing account to tenancy by entirety, but I figure it’s better to try to successfully get it in place than not.

smackboy1
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Joined: Wed Mar 14, 2007 9:41 pm

Re: Tenancy by Entirety in a Brokerage- How does it work?

Post by smackboy1 » Thu Apr 18, 2019 9:55 am

chambers136 wrote:
Wed Apr 17, 2019 9:55 am
So, I'm the only one who does anything with this account, such as adding money (from a joint account) and buying and selling mutual funds/ETFs. Does the Tenancy by Entirety impact the ability for me to manage this, or is there some sort of complication where we both have to log in to approve trades, withdraws, etc?
My SO and I both have our accounts at Vanguard. We each have our own individual accounts and also a joint account held as "tenants by the entirety with right of survivorship". We are tracked by SSN, so when I login to my account I have full access to my personal account and the joint. There are almost no limits what I can do by myself with the joint account through the website - buy, sell, transfer, billpay, electronic check, etc.. We elected for joint paper checks to only require 1 signature, but I think 2 signatures is an option. If we need to make a wire transfer it requires both of us to give voice authenticated authorization. Although I could transfer out all the joint assets, I cannot close the account alone.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.

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