Four women lock arms, symbolizing the financial security gained by nominating a trusted contactMany of us are experiencing life for longer. It’s increasingly common to live 20-30 years in retirement. More of us are also experiencing a single lifestyle, either as a deliberate life choice, or as a result of divorce, widowhood, or simply relocating away from family and friends. In response to these population changes and other factors, Charles Schwab recently implemented a trusted contact option. This is an important part of your financial plan, and SageVest Wealth Management has now also adopted this approach. Below, we discuss what a trusted contact is, and why everyone needs a trusted contact. 

What Is A Trusted Contact?

Whatever your age, it’s important to have a few go-to people that you can call upon when you need some extra help. This is no less true when it comes to your finances.

You can now choose to nominate one or more trusted individuals to help safeguard your financial wellbeing in the future. The people you select will become a first point of contact should Schwab or your SageVest advisor have concerns in the future regarding your wellbeing, relative to your finances.

You can elect one or two trusted contacts for your Schwab accounts. SageVest clients can also designate up to two trusted contacts to keep on file here at SageVest. Trusted contact designations are optional, but recommended.

Trusted Contact Vs. Financial POA

A trusted contact is different from a financial Power of Attorney. A trusted contact serves only as a point of contact. A trusted contact:

  • Has no authority over your money.
  • Cannot make decisions on your behalf.
  • Cannot access your account balance, account activity, or other account information.
  • Cannot change your account information, contact details, or other account elections. This includes nominating, updating, or removing other trusted contacts.

Why Do I Need A Trusted Contact On File?

Adding a trusted contact provides a resource should it become necessary for Schwab and/or SageVest to reach out on your behalf in the future. Nominating a trusted contact also grants permission to discuss and disclose information about your finances in order to address situations where you may be at risk financially. For example:

  • To raise concerns regarding possible financial exploitation or fraud. The most recent figures show that financial exploitation of older Americans is widespread, with losses totaling more than $6 billion dollars in recent years [1].
  • To confirm your whereabouts and contact information, if you haven’t been in touch for an extended period.
  • To recount concerns about your physical or mental health status that may be impacting your ability to make sound financial decisions.
  • To verify the capacity and identity of any legal guardians, executors, trustees, holders of power of attorney, or other financial or legal agents.
  • To identify other significant information regarding your finances, if we cannot contact you directly.

How Do I Elect A Trusted Contact?

The forms to designate a trusted contact are short and simple. You need complete only one form for all of your Schwab accounts. Any named party must be over 18, but doesn’t necessarily need to be your designated Power of Attorney. It’s recommended that you inform each individual that you’ve authorized them as a trusted financial point of contact.

Nominating a trusted contact is an optional designation, but one that SageVest recommends you implement as soon as possible, as part of your broader wealth planning. Please contact us to discuss your choice in more detail.

References

[1] https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_suspicious-activity-reports-elder-financial-exploitation_report.pdf

Prepared by SageVest Wealth Management. Copyright 2019.

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