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Rowling & Associates Blog

Have You Named a Trusted Contact?

by Christiane Melano

Financial exploitation costs vulnerable adults in the United States an estimated $2.9 billion every year. Since 2017, suspicious activity report filings regarding seniors have almost quadrupled. Naming a trusted contact can help to keep your accounts secure.

What is a Trusted Contact?

A Trusted Contact is a person you designate on your accounts with Schwab to help us act quickly, should you suffer diminished capacity in managing your finances or if you are vulnerable and become a target of fraud. Having a trusted contact allows us to speak with them regarding suspicious activity.

This person is not able to view your account, execute transactions, or inquire about account activity (unless they are a Trustee or POA).

While this person will not have the ability to act on your behalf, they can help in the following ways:

• Confirm your contact information
• Be a contact person in the event of suspicious activity
• Help to identify red flags indicating you are being exploited financially

You still maintain full authority on your account and only you can remove or edit your Trusted Contact.

Why is one needed?

As we age, diminished capacity can affect our ability to make sound decisions, and in some cases, be able to give informed consent. In our January blog, Financial Planning for Dementia/Alzheimer’s, we reviewed multiple tools available to help protect you should you face these difficult situations.

In addition to updating your estate documents and having an advance health care directive, a Trusted Contact is another available tool to help protect you and your wishes.

This differs from a Durable Power of Attorney (POA). A Durable POA is not affected by an account owner’s incapacity and grants an individual the authority to trade in the account, transfer and withdraw funds, and take actions to the same extent as the account owner. However, Trusted Contacts can be set up in addition to a Durable POA if it is a good fit for your situation.

Who to choose?

Schwab suggests that you designate individuals that are not already authorized to receive information or act on your behalf. Ideally, these are individuals that you trust, and are most likely to know and understand your current situation.

In the event financial exploitation is suspected, we can follow the necessary steps to reach out to your Trusted Contact to evaluate the situation further. If more action is deemed necessary, we can work with Schwab to place a temporary disbursement hold on your accounts, while contact is made to all parties authorized on the account.

How do you set up a Trusted Contact?

If you would like to add a Trusted Contact to your Schwab accounts, you can add up to two per account. There are currently three ways to set up your Trusted Contact:

1. You can contact the Client Service Team at Rowling & Associates to help you complete the Schwab form.

2. If you are registered on Schwab Alliance, you can update your Trusted Contacts by logging into www.schwab.com. Once you log in and locate the drop-down menu in the far right corner, select the “My Profile” link.

You will then see a Trusted Contact tab, where you can click the “Add Trusted Contact” button to enter their information and assign them to your accounts.

3. Trusted Contacts can also be set up when establishing any new accounts at Schwab by completing this section of the application.

Please contact us if you would like more information on setting these up on your accounts.