No, this is not a Yogi Berra quote; but it reminded me that sometimes a person may become forgetful or for some other reason may need help from someone they trust. I often see that clients are unsure regarding the differences among Trusted Contact, Power of Attorney, Trustee, and Executor. Below is a very brief description of each. You should always seek legal advice when deciding if any of these will be utilized. Whomever you choose for these positions must be someone you trust, and who has the competency to handle the duties they entail.
A Trusted Contact is a person you authorize to act as a point of contact for your financial accounts in certain circumstances. They can help protect your accounts and financial interests by providing information to your financial institution if you are unable to be reached; and may also be contacted if your financial advisor sees activity that may indicate that financial exploitation of you or your accounts is occurring. A trusted contact may be a family member, attorney, accountant or another third-party who you believe would respect your privacy and know how to handle the responsibility. The Trusted Contact cannot make trades or decisions or changes in accounts.
A Power of Attorney (POA) is a legal document giving one person (the agent or attorney-in-fact) the right to make certain decisions for another (the principal). There are several types of POA, with the broadest of these is known as a general POA, though other, more specific POAs can limit the power of an agent to certain actions. A couple examples include: Financial POA, Military POA, Springing POA, Medical POA, and Durable POA. There is not room in this article to cover what all of these are, nor what the specific responsibilities include; but it is important to choose the POA that fits your need. One other note that is often misunderstood: the POA is only effective while the principal is still alive.
A Trustee is responsible for managing a trust, which is a legal arrangement that places specific assets under the trustee’s control and ownership. While they often play a crucial role in estate planning and distributing assets, trustees can also manage other matters, such as charitable trusts or bankruptcy cases. A trustee is a person or entity (like a bank or company). Although the trustee is the legal owner of the trust assets, they MUST act in the best interest of the trust beneficiaries and grantors (the person or entity that creates and funds the trust); and equally importantly must adhere to the terms of the trust.
Anyone who has been chosen as an Executor knows that this is both an honor and a big responsibility. Before accepting, you should be sure you understand what you're getting into. Broadly speaking, you'll be distributing the deceased person's property and arranging for payment of estate debts and expenses. However, sometimes family dynamics, legal entanglements, or other complications can arise. Therefore, be aware that there may be many interested parties in the estate for which you are now responsible.