Three business partners establish a joint brokerage account registered as Tenants in Common (TIC) with equal ownership interests. Upon receiving formal notice of the death of one of the partners, what immediate operational action must the broker-dealer take regarding the account?
- AAutomatically transfer the deceased owner's equal percentage share to the two surviving account owners.
- Cancel all open orders and freeze the account until required legal documents are presented by the executor of the estate.Cevap
- CAllow the surviving tenants to continue trading existing positions, provided no cash distributions are made out of the account.
- DSubmit an expedited request to FINRA to approve the re-registration of the account under a new legal structure.
Cevap
Cancel all open orders and freeze the account until required legal documents are presented by the executor of the estate.
When a firm receives notice of the death of a tenant in a Tenants in Common (TIC) account, the deceased owner's interest does not automatically pass to the surviving tenants. To protect the estate's interest, the broker-dealer must immediately cancel all open orders and place a freeze on the account until necessary legal documentation (such as a certified copy of the death certificate and letters testamentary) is supplied by the executor of the decedent's estate.
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Tenants in Common (TIC) Death Procedures