Financial Planning and Identity Theft Protection – Prepare for Death and After Death By Christina Mae Olson, CFP®
I must confess that for years I have been reading the AARP Bulletin. The Bulletin has a wealth of financial information for people of all ages. I have gotten so many valuable tips and resources for my practice from the Bulletin. I wrote and asked AARP if they would let me subscribe even though I’m not age 50 yet – the golden age of membership eligibility in AARP. They wouldn’t do it. My mother used to save her copies for me. Now, I can read it courtesy of my partner who turns 50 this year and is a member. The Bulletin will give any adult child great insight into the financial world of their parents – in addition to help you plan for your own financial future.
For those of you who want to sneak a peek at the Bulletin you can do so for free at www.aarp.org – and follow the link to the AARP Bulletin. Every single issue is full of practical financial advice. Read the article entitled GRAVE ROBERY from the March issue. It discusses how identity theft is happening to the dead; leaving heirs and survivors with huge debts to deal with while vulnerable from mourning the loss of a loved one.
Financial planning is all about being prepared. A good financial plan is a proactive one. The plan begins with a set of dreams or goals. When can you pay off your mortgage? When can you retire or scale back at work? How can you send your kids or grandchildren to college? You save, you spend wisely and you invest with caution. You buy insurance to insulate you from uncertain catastrophic loss. You review your status every few years to make sure you are on track to meeting your goals. Are you protecting your self against identity theft?
Financial planning is often about preparing for your death. Identity thieves are stealing social security numbers, credit and other information about recently dead people and using it to obtain social security numbers, duplicate driver’s licenses and birth certificates. They apply for credit with this information and run up massive charges in the name of the decedent. The Identity Theft Resource Center reports that 400,000 checking accounts were opened in the names of recently deceased people in 2004. This number more than doubled to 905,000 in 2006!
If you are the executor or “personal representative” for someone’s will or estate - here are ways to protect you and your parents or other dying (or dead!) family and friends from grave robbing identity theft:
- Don’t include date of birth or other identifying information in the obituary.
- Have friends present at the house of the deceased and the homes of family members during the visitation and funeral. Theft happens to an empty house!
- Cancel credit cards and other charge accounts immediately after death.
- Request at least 25 certified copies of the death certificate as soon as possible after death.
- Send death certificates to the three credit reporting bureaus (Equifax, Experian, and TransUnion) with letters closing all credit accounts.
- For joint account holders – change account ownership to your name only immediately after death.
- Ask the Division of Motor Vehicles to cancel the decedent’s driver’s license and to refuse all requests for duplicates.
- Don’t pay the final bills for the deceased unless you are sure the charges are valid. Caution family members to scrutinize their charges also.
Remember that gay and lesbian couples have to take extra steps to insure that their financial lives are protected. While living (and legally competent!) you must have a durable power of attorney naming your partner or someone you trust to handle your financial affairs if you cannot. PLEASE BE AWARE that the power of attorney dies with you when you die! The will (and to a lesser extent, joint ownership) is the only way you can name someone to handle your financial affairs after you die! You will be especially vulnerable to grave robbing identity theft if you die without a will. No one, not even your lover, will be able to act on the above suggestions unless you authorized them to do so in your will.
Chris Olson is a Certified Financial Planner™ practitioner with a fee-only private practice. You can reach her at 608-525-9818 or CMOney@centurytel.net.