Who Is Your Trusted Contact?

Key Points:

• A trusted contact is an emergency contact for your investment accounts—not someone who can access or control your money.

• They can help your financial institution or financial advisor respond appropriately if you're unreachable or concerns arise about fraud, cognitive decline, or your well-being.

• Choosing and periodically updating a reliable trusted contact is a simple, no-cost step that adds an important layer of financial protection.

Most people have heard of a beneficiary. Fewer know what a trusted contact is.

That's understandable—it's one of those account features that often gets skipped during paperwork. But it can become incredibly important when life doesn't go according to plan.

Many financial institutions and investment custodians offer the option to designate a trusted contact. If yours does, it's worth taking advantage of this simple but valuable safeguard.

What Is a Trusted Contact?

A trusted contact is simply someone your financial institution can reach out to if there's concern about your well-being or your ability to manage your finances.

Think of them as an emergency contact for your investment accounts.

Importantly, a trusted contact cannot:

• Make trades
• Withdraw money
• Change account information
• Act on your behalf
  

A trusted contact also does not need to have power of attorney or any legal authority over your accounts. Instead, they're simply someone your financial institution can contact if they can't reach you or if they suspect something unusual is happening.

When Does a Trusted Contact Help?

Most people will hopefully never need one. But when they are needed, they can make a meaningful difference.

Here are a few examples:

• You experience a medical emergency and become unreachable.
• There are signs of cognitive decline, and unusual financial decisions raise concerns.
• Your financial institution suspects financial exploitation or elder fraud.
• Multiple attempts to contact you have been unsuccessful, and there's concern about your well-being.
  

In situations like these, having a trusted contact gives your financial institution another way to confirm what's happening before a small problem becomes a much bigger one.

Choosing the Right Person

For many people, a spouse is the natural choice. Others may prefer an adult child, sibling, close friend, or another trusted individual.

The most important consideration isn't the relationship—it's whether that person could be reached and would be able to help if concerns arose. Someone who knows you well, is dependable, and is likely to respond when contacted is usually the best choice.

It's also worth considering whether your spouse or chosen contact would be in a position to help if something happened. For example, spouses who are close in age may experience similar health challenges at the same time, or one spouse may not be actively involved in managing the household finances. Every situation is different, but it's worth giving the decision a little thought.

Three Questions Worth Asking

As you're reviewing your financial plan, consider these questions:

• Do you know who your trusted contact is?
• Would that person actually be able—and willing—to help if something happened?
• Is your trusted contact information still current?
  

Life changes. Relationships change. It's worth reviewing this information every few years, just as you would your beneficiaries or estate planning documents.

A Small Step That Can Make a Big Difference

Financial planning isn't just about investments and taxes. It's also about preparing for the unexpected.

Designating a trusted contact takes only a few minutes, costs nothing, and adds another layer of protection for you and your family.

If you're not sure whether you've designated a trusted contact—or if it's time to update the person you've named—consider contacting your financial institution or advisor. It's a simple review that can provide valuable peace of mind.