Unsupported Browser Detected

Internet Explorer is not fully compatible with the features of this website. For the best possible experience, please switch to Chrome or Firefox. Click each to download if needed.

You are: individual

I’m an individual or investor looking to take action to help secure my financial future.

I want to tackle the retirement and protection needs of individuals.

I want to learn more about your employer plan solutions and technology.

I want to log in to my account or learn more about retirement planning and enrolling.

Hello

I want to tackle the retirement and protection needs of individuals. This website content is intended for use by Financial Professionals.

Hello

I want to tackle the retirement and protection needs of individuals. This website content is intended for use by Financial Professionals.

Insights & Education

Trusted contacts and beneficiaries


Don’t overlook these two important selections in securing your legacy

When it comes to planning for your financial future and that of your loved ones, two important roles often come up: trusted contacts and beneficiaries. Both play distinct roles, and understanding the difference between the two is essential for effective financial planning and wealth transfer.

Here’s a breakdown of what the roles entail and why each is an important part of your overall plan health.

What is a trusted contact?

A person you select who can be contacted on your behalf should a situation about your welfare arise.

What is a beneficiary?

An individual or entity designated to receive assets or benefits from an account or insurance policy when the accountholder passes away.

More about trusted contacts

A trusted contact is a person you select who can be contacted on your behalf should a situation about your welfare arise. This person must be at least 18 years old and is typically a family member, significant other, close friend or personal attorney. Importantly, this person does not have Power of Attorney, a legal document that gives them the authority to act on behalf of another person. Trusted contacts simply serve as a point of contact to help your financial institution ensure your account remains secure, should you be unreachable.

Key points to consider:  

  • Trusted contacts are intended to help protect an accountholder’s interests. For instance, if the accountholder is unreachable or unable to make informed decisions about their account, the trusted contact can verify the situation.

  • Trusted contacts don’t have access to your funds or account. They cannot make changes or initiate transactions.

  • If a financial institution suspects fraudulent activity or has concerns about the accountholder’s mental capacity, they can reach out to the trusted contact. This is especially helpful in cases where the accountholder may be unable to manage their finances independently. 

  • Typically, a trusted contact is someone the accountholder trusts completely, like a close family member or friend, but they don’t necessarily have to be a beneficiary. 

More about beneficiaries

A beneficiary is an individual or entity designated to receive assets or benefits from an account or insurance policy when the account holder passes away. Beneficiaries are often assigned to life insurance policies and retirement accounts and help facilitate a smooth transfer of assets upon the accountholder’s death.

Key points to consider

  • Beneficiaries inherit the actual assets or financial benefits (e.g., cash, investment accounts, life insurance payout) from the account after the accountholder’s death.

  • Accountholders can name multiple beneficiaries, each with a specific percentage of the total assets, so they know who will receive what portion of their estate.

  • Beneficiaries have a legal right to the designated assets upon the accountholder’s death, provided there are no other overriding legal obligations (like debts).

  • There are two main types of beneficiaries—primary and contingent. The primary beneficiary is the first in line to receive assets. If the primary beneficiary is unable to receive them (due to their own passing, for example), the contingent beneficiary is next in line. 


    Learn more about the importance of beneficiary designations.

Why you might need both

Having both a trusted contact and beneficiary (or beneficiaries) in place is a proactive step for financial security and peace of mind. Selecting a trusted contact can help protect your finances while you’re alive, while choosing a beneficiary ensures that your assets go where you want them to go after your passing. 

Take action today

If you haven’t selected a trusted contact for your retirement and other financial accounts, now is a good time to do so. The same goes for selecting a beneficiary or beneficiaries. Most financial institutions allow you to name both trusted contacts and beneficiaries online or via paper forms. It’s wise to review these designations periodically to ensure they align with your current wishes and personal relationships.

By understanding the role of a trusted contact—and how it differs from assigning a beneficiary—you can structure your financial plans to protect and manage your assets effectively, both during your lifetime and after.