Most people wouldn’t consider leaving town for a vacation without notifying at least one friend or family member.
However, only about 40% of investors have told their financial companies who they should contact in case of an emergency.1
Such an individual is called a trusted contact person (TCP), and they are someone who your financial institution can get in touch with if you’re unavailable.1
There are a variety of unexpected circumstances in which a TCP can relay a critical message for you, such as having a health issue or facing a natural disaster. Alternatively, perhaps you’re traveling to a place that has limited Wi-Fi reception or cell phone service. A TCP can speak to the financial institution on your behalf.1
There are other such circumstances as well. Imagine that the financial institution suspects fraud or unusual activity on your account and you’re out of reach. The financial institution can connect with your TCP to help address urgent, red-flag issues.1
“For by grace you have been saved through faith. And this is not your own doing; it is the gift of God, not a result of works, so that no one may boast.” Ephesians 2:8-9
When we work with clients to add a trusted contact, we often hear the question, “What’s the difference between a trusted contact and a financial power of attorney (POA)?”
Think of your TCP as your second line of defense. A TCP would be asked to provide or confirm information in the event you can’t be reached. For most, a TCP is a family member, relative or friend who you stay in touch with. Remember, a TCP can’t access accounts or direct any trading.
A financial POA, on the other hand, is someone you authorize to make financial decisions if you are unable to do so yourself. A financial POA can take over managing your finances or paying your bills. A financial POA often is designed to become active when a person is unable to make finance decisions on their own.2
We can help identify people who you may want to serve in the TCP position. We can also discuss the financial POA and what to consider when identifying a healthcare POA. In addition, we also work with clients so that all financial accounts are properly titled, ownership is clear, and beneficiaries are in place.
If this seems a bit overwhelming, we have tools that can help break these decisions down into more manageable steps.
We introduced Everplans to our clients several years ago to help manage estate issues as well as other types of financial preparations. One of the features of Everplans is permission-based viewing, which allows the owner to tailor access to only certain individuals. So you can determine “who can view what” with your personal finances. We would be happy to send you an invite to Everplans. If you’re not ready to start with Everplans, we have other tools that you can use.
A TCP is just one person who can play a role in your overall personal finances. As you consider who may be the best fit for that role, it’s important to remember what they can and can’t do for you.
