"JT TEN" appearing on a stock certificate indicates there are joint owners of the stock represented by this certificate. Joint tenancy is often used by certificate owners who are married or have other familial relations -- such as father/son or brother/sister -- establishing equal rights for both parties in this stock ownership. Unless otherwise specified, the death of one joint owner allows the ownership to automatically transfer to the surviving joint tenant.
Joint Tenancy Defined
Joint tenancy describes the legal ownership of property -- real estate or other definable assets -- by two or more people or legal entities. The joint tenants may be related or unrelated. Unless otherwise specified, all joint tenants enjoy the right of survivorship, meaning the entire share of the deceased owner automatically transfers to the surviving joint tenant. Sometimes noted as "JT WROS," the transfer of ownership is not subject to probate claims by others, except for valid tax liabilities.
Undivided Interest
Registering a stock certificate as "JT TEN" means that all those named have an undivided interest in the total shares noted on the certificate. Unlike tenants-in-common, whose ownership percentage might be equal or unbalanced, joint tenants each own all of the shares listed. This may sound a bit confusing, but it's an important legal definition. This status allows full ownership to pass to the surviving joint tenant upon the death of the other owner. Justified by each party's undivided interest, full ownership and transfer is a clear and relatively simple task.
Tenancy by the Entirety
Like joint tenants, tenancy by the entirety -- written as "TEN ENT" -- indicates undivided ownership of the shares stated on the certificate. This form of ownership is not available in every state, as joint tenancy is. One important legal difference from joint tenancy: This form of ownership is only available to married couples. In those states where it is permitted, most married couples own their homes and other real estate as tenants by the entirety. However, this ownership type is less common with stock certificates. Even most married couples use joint tenancy as stock ownership options.
Tenancy in Common
Joint tenancy and tenancy in common, while similar, are legally very different. Confusion often arises because both types involve multiple ownership. Like joint tenancy, tenants in common may be related or unrelated. However, neither co-tenant has an exclusive right to use or possess the asset, but each has an equal right to occupy, use or possess the property. More importantly, there is no right of survivorship. Should a co-tenant die, his share will transfer to his heir or per the instructions of a will. All co-tenants must agree on sell or modification decisions.