Being a victim of identity theft is always a frustrating ordeal, but millions of Americans have to face an even more troubling scenario: Finding out that a criminal has applied for credit in the name of a deceased family member. A new study finds that, each year, the identities of some 2.5 million dead Americans are stolen.
In nearly 800,000 cases, criminals used the stolen identities to open lines of credit and establish cell phone service, according to research conducted by ID Analytics. In 1.6 million more cases, identity thieves use fabricated Social Security numbers that belonged to people who are deceased. The study also identified what it characterized as “several hundred thousand” instances of identity theft committed against dying people.
These are pretty discouraging numbers, but estate planning experts say there are steps you can take to help protect you or your family members that make it easier to straighten out if identity theft does occur.
If you have a loved one who enters a nursing home, assisted-living facility or the like, make sure you know who has access to their bank accounts, credit cards and other financial information. “They may be in a compromised position to be dealing with credit and their bills,” says Irwin Feinberg, an attorney specializing in estate and trust issues at Feinberg, Mindel, Brandt & Klein LLP.
After death, the executor or attorney handling the estate should notify the state agencies that monitor these statistics; the departments will vary by state but likely will include taxation and health services divisions. With the death on record, “The odds of someone being able to improperly use their ID are significantly less,” Feinberg says.
It’s also crucial that survivors stay in communication with the administrator of the estate, Feinberg says. If an identity thief runs up debts in the deceased’s name, a creditor can file a claim against the estate. Make sure the administrator keeps you apprised of any claims against the estate. If a creditor does come knocking, establish when the fraud occurred. If it was after the victim passed away, the lawyer handling the estate will reject the claim by providing the creditor with proof that the person wasn’t alive and couldn’t have incurred the debt in question.
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If the fraud took place while the victim was alive but wasn’t uncovered until after death, get as much information as possible about the nature of the fraud. You want to provide information that can establish fraudulent use of the deceased’s credit, Feinberg says. For instance, if a crook signed up for a cell phone in your dad’s name in California, and you can show he was in a nursing home in Virginia at the time, the creditor isn’t going to be able to validate their claim on the estate.
Since so much of our lives and our personal information is now posted on social media sites, there are a few specific things you should do regarding your online presence and that of your loved ones to thwart would-be identity thieves. Along with your will and other estate planning documents, people should keep — and keep up-to-date — a list of email and social media accounts and login credentials, says Rich Arzaga, founder and CEO of Cornerstone Wealth Management, Inc. It should be stored somewhere securely or entrusted with the estate planner or trustee.
When someone dies, survivors should identify a responsible party who is assigned the job of winding down communication, shutting down or memorializing social media profiles and email accounts, Arzaga says. Since many people have passwords that are easy for hackers to guess, as long as the account is active, there’s a risk that a hacker could exploit it and mine the account for personal information.