I get the best ideas for my articles from the questions advisors ask during my presentations, and this article is no exception.

The speaking engagement was “Seniors, scams and fraudsters” and how to fulfil your duty as advisor to your senior clients. I had no time during my 45-minute presentation (quite long enough for the audience to listen to a lawyer!) to go into the topic of trusted contact person (TCP), but I did squeeze one bullet point into a slide, saying that the TCP and power of attorney (PoA) must be different people.

I had time for only one question at the end of my session, and I chose a deserving advisor who had the guts to sit in the front row of the huge hall. He asked me why the TCP and PoA had to be different people. What a great question!

However, I was rushed to answer, because I was given the signal to wrap up. I felt I gave the topic short shrift, so instead I wrote this article.

Why is it better, and in my view necessary, to have the TCP be a different person from the PoA? The short answer is that if the PoA strays, which no one hopes happens when they choose their PoA, there is nowhere to turn if the PoA is also the TCP.

Here is an example. Let’s call your client Mooky. When choosing a PoA, Mooky knows that it is best to choose someone with some financial acumen, someone diligent and, most of all, someone who is trustworthy. The PoA document usually permits the appointed attorney to have full access to all assets. If Mooky is incapacitated, there is no one to watch the PoAs to ensure there is no fraud. Yes, it is recommended that Mooky chooses two PoAs to work together, but I am not an estates lawyer, so I am not going to go down the rabbit hole of how to appoint a PoA.

Let’s say that Mooky chooses his sister Suzy, and her husband, Irwin, as PoAs for property. Five years later, Mooky is incapacitated, and Suzy and Irwin take over. By then, Irwin has developed a drug habit, and he convinces Suzy to put her hand into Mooky’s cookie jar to support his habit. Irwin is tricky, and they take only a small sum at a time, but before you know it, a significant sum has been redeemed.

Once the advisor catches on and raises concerns, there is nowhere to turn: the TCP is also Suzy. The advisor is not permitted to call anyone else to discuss the concerns about Suzy and Irwin.

If, however, Mooky had chosen his sister Ursula as the TCP — Ursula is trustworthy but doesn’t have Suzy’s financial acumen — at least the advisor could call Ursula to tell her that she needs to bring proceedings to remove Suzy and Irwin as PoAs for Mooky’s property.

If you think this is an extreme example, think again.

I understand that it is common practice for advisors to choose the same person as both their PoA for property and TCP. The reason, I am told, is that the PoA is the person the client trusts “the most.”

The TCP doesn’t have to be trusted with any property; they have no authority to manage or direct or instruct in respect of the client’s property. The TCP is another person to call if there is a problem. And problems of trust commonly arise with PoAs for property. Advisors need someone to call, other than the PoA, when they have a concern. That is why we have the TCP.