Financial Industry Regulatory Authority (FINRA) Practice Exam 2025 - Free FINRA Practice Questions and Study Guide

The appropriate response to the scenario involving Craig and Judy separating their assets for their children while maintaining access is to set up individual transfer on death (TOD) accounts with limited power of attorney.

Creating individual TOD accounts allows each person to designate their respective beneficiaries, which in this case would be their children. This structure ensures that upon the death of one account holder, the assets in that account will directly transfer to the named beneficiaries without going through probate, thus providing an efficient means to pass on assets. Additionally, having a limited power of attorney adds a layer of access and control, allowing one another to manage the accounts if needed without relinquishing outright ownership.

In this context, other options might not effectively meet their goals. For instance, joint tenants in common would not provide for automatic transfer of assets to their children upon death, as each person's share can be differently managed, which could complicate matters for surviving family members. Joint tenants with rights of survivorship would mean that the surviving account holder would automatically receive the deceased’s share, not fulfilling the objective of designating their children as direct beneficiaries. A partnership account typically involves a business relationship rather than purely personal asset management and could complicate personal asset distribution upon death. Thus, choosing individual TOD accounts with a