A JTIC account, short for joint tenants in common, is a brokerage or bank account owned by two or more people in fixed percentages they choose, where each owner’s share passes through their own estate at death rather than automatically to the surviving co-owners. That death-transfer rule is the whole reason the account type exists as a separate option, and it is what separates it from the more common joint tenants with right of survivorship (JTWROS) account most married couples use.
How Ownership Works Inside the Account
Each owner holds a fractional interest in the total assets. The percentages are set when the account is opened and stay fixed unless every owner agrees to change them. They don’t have to be equal, and they don’t have to match what each person contributed, though a mismatch between contributions and ownership can create gift tax issues covered below.
Trading authority is a separate question from ownership. At most brokerage firms, any owner on a joint account can place buy and sell orders without asking the others, regardless of the ownership split. The percentages govern how income, gains, and the account balance are divided for tax and estate purposes; they don’t restrict who can push the buttons. That makes trust between co-owners a practical prerequisite.
One exposure worth understanding: because each co-tenant’s fractional interest is a distinct asset, a creditor with a judgment against one owner may be able to reach that owner’s share. The other owners’ shares are generally protected from each other’s creditors, but a co-owner in financial trouble can still cause problems, particularly if a creditor forces liquidation of the debtor’s portion.
JTIC vs. JTWROS
Most joint account decisions come down to a choice between these two structures, and picking the wrong one produces results the owners never intended.
A JTWROS account treats every owner’s interest as equal. When one owner dies, the deceased owner’s share automatically transfers to the survivors outside of probate. A JTIC account lets owners set any split they want, such as 60/40 or 75/25, and sends the deceased owner’s share through probate to whoever the will names.
Three practical differences follow from that:
- Ownership splits. JTWROS locks in equal shares. JTIC lets you match ownership to actual contributions or to whatever ratio the co-owners have agreed on.
- Death of an owner. JTWROS hands the deceased owner’s share to the surviving co-owner automatically. JTIC sends that share through the deceased person’s will, or through state intestacy rules if there is no will.
- Estate planning control. In a JTIC account, each owner decides who inherits their share. In a JTWROS account, the surviving co-owner is the recipient regardless of what the will says.
Married couples who want assets to move to the survivor without friction usually pick JTWROS. Business partners, siblings splitting an inherited portfolio, and unmarried co-investors typically pick JTIC because it keeps each person’s share separate for estate purposes.
Taxes While the Account Is Open
Tax reporting for joint accounts catches many co-owners off guard. Brokerage firms generally issue Form 1099 documents (1099-DIV for dividends, 1099-INT for interest, 1099-B for sales proceeds) under the Social Security number of the first person listed on the account. The full amount of income appears on that single form even though only a portion belongs to that person.
Fixing this takes a step called nominee reporting. The first-listed owner reports the full amount on their own return, then subtracts the other owners’ shares as nominee distributions. Each other owner reports their share on their own return. The split follows the ownership percentages set when the account was opened. Skipping the allocation means either overpaying (if the first-listed owner reports everything as their own) or underreporting (if the other owners ignore their share), and either mistake can prompt an IRS inquiry. Keep written records of the agreed percentages and file consistently across all the returns involved.
Gift Tax When Contributions Don’t Match Ownership
If one owner puts in more money than their ownership percentage reflects, the excess can be treated as a gift to the other owners. The IRS defines a gift as any transfer where you don’t receive full value in return.1Internal Revenue Service. Frequently Asked Questions on Gift Taxes For joint bank accounts specifically, the IRS treats the gift as occurring when the non-contributing owner withdraws the funds for their own benefit, not at the moment of deposit.
For 2026, each person can give up to $19,000 per recipient without filing a gift tax return.1Internal Revenue Service. Frequently Asked Questions on Gift Taxes Married couples electing gift-splitting can double that to $38,000 per recipient. Above the annual exclusion, the donor files Form 709, though no tax is owed until the donor has used up their lifetime exemption, which is $15,000,000 for 2026.2Internal Revenue Service. What’s New – Estate and Gift Tax
If you open a JTIC account with a 50/50 split but one person funds the whole balance, document whether the disparity is a loan, a gift, or an advance against future contributions. Ambiguity there creates problems at tax time and again during probate if one owner dies.
What Happens When a Co-Owner Dies
The death of a co-tenant is where a JTIC account behaves most differently from a JTWROS account, and where most planning mistakes surface.
No Automatic Transfer to Survivors
The surviving owners keep their original percentages and nothing more. The deceased owner’s share does not move to them. It becomes part of the deceased person’s estate and is distributed under their will, or under state intestacy rules if there is no will. This is the core feature that separates tenancy in common from joint tenancy with right of survivorship.
The Account Freeze
When a brokerage firm is notified that a co-owner has died, it typically restricts activity on the deceased person’s share until someone with legal authority over the estate provides the required documentation.3FINRA. When a Brokerage Account Holder Dies – What Comes Next That documentation generally includes a certified death certificate, a court letter appointing the executor or personal representative, and an affidavit of domicile. Some firms also require a state inheritance tax waiver.
There is no fixed timeline for the freeze. A well-organized estate with a clear will and a named executor can resolve it in weeks. A contested estate, or one with no will, can leave the deceased owner’s portion frozen for months. Surviving co-owners can usually continue managing their own portions during that period, though some firms restrict all activity until the estate matter is settled.
Probate for the Deceased Owner’s Share
Because the deceased owner’s share must pass through their estate, it generally requires probate. Probate court filing fees and executor commissions add up on top of the delay. Most states offer a small estate affidavit process that lets heirs claim assets without full probate when the estate falls below a state threshold, but the availability and dollar limit depend entirely on state law.
Step-Up in Basis
One significant tax benefit of the JTIC structure is that the deceased owner’s share receives a stepped-up cost basis at death. Under federal tax law, property acquired from a decedent takes a basis equal to its fair market value on the date of death.4Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If the account holds investments that appreciated substantially, the heirs who receive that share can sell at the stepped-up value and owe little or no capital gains tax on the appreciation that occurred during the decedent’s lifetime.
Only the deceased owner’s fractional share is stepped up. The surviving co-owners’ shares keep their original cost basis. A JTWROS account produces a similar result for the deceased owner’s half, but because JTWROS requires equal ownership, you can’t route a larger percentage to the person most likely to die first. JTIC gives you that flexibility.
Using a TOD Designation to Skip Probate
If probate is the main drawback of a JTIC account, a transfer-on-death (TOD) beneficiary designation can solve it. Each owner names a beneficiary for their share, and at death that share passes directly to the named beneficiary outside of probate. Not every firm handles TOD designations on tenancy-in-common accounts the same way, so confirm the process with your brokerage before assuming it is in place. Done properly, a TOD removes the biggest complaint about tenancy in common without giving up the flexible ownership splits and estate control that make the account type useful.
When a JTIC Account Is the Right Fit
JTIC accounts fill a specific niche. They work when co-owners want unequal ownership splits, when each person wants to decide who inherits their share, or when the co-owners aren’t married and don’t want automatic survivorship. Typical situations include business partners investing shared profits, siblings managing an inherited portfolio together, and unmarried partners who want to keep their estate plans separate.
They are the wrong choice when a couple simply wants the survivor to get everything without paperwork, when the co-owners don’t trust each other with shared trading authority, or when nobody wants to handle the nominee reporting each year. In those cases, separate individual accounts or a JTWROS with equal ownership is simpler and gets to the same result with less friction.
Opening one is largely a standard brokerage process: most firms offer JTIC as an account-type option on their online applications, and each owner completes identity verification separately. The one instruction specific to this account type is to select “Tenants in Common” rather than “Joint Tenants with Right of Survivorship” on the application, and to agree on the exact ownership percentages before you start, because correcting either after the fact usually requires opening a new account.