Ancillary Trustees

What happens if your broker passes or your broker is the subject of a disciplinary suspension or revocation?  Although such is horrible to contemplate, should the unexpected occur it doesn’t necessarily mean the end of brokerage operations.

The Superintendent of the Ohio Division of Real Estate has the authority to appoint an interested party  to conclude business transactions of the brokerage until: (a) another broker affiliates with the brokerage to keep the brokerage operating, or (b) the brokerage affairs are wound up.

The Superintendent will appoint an Ancillary Trustee as soon as possible after an application is made. The Superintendent must find the Ancillary Trustee qualified to handle brokerage operations, but the Ancillary Trustee need not necessarily be a licensed broker.  The Ancillary Trustee may be any other fiduciary, attorney, family friend or even an executor.  The Ancillary Trustee is only permitted to supervise and complete existing contracts and obligations of the former broker.  The Ancillary Trustee is not permitted to initiate new ventures or obligations.  Such efforts may only be initiated once a new licensed broker affiliates with the brokerage.

Upon completion of his/her service, the Ancillary Trustee must file a report with the Superintendent that  states all  business transactions concluded and formally withdraw as Ancillary Trustee.

In succession planning for the brokerage in the event of the unthinkable, the appointment of an Ancillary Trustee may be a critical step in continuing brokerage operations.  Thought should be given to who may serve in such a role should events necessitate the appointment of an Ancillary Trustee.

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