Protecting Your Deceased Loved Ones From Identity Theft

We've all been warned about protecting ourselves from identity theft, but one group of victims can't take action to protect themselves—the dead. Identity thieves steal the identities of more than 2 million deceased Americans a year, according to fraud prevention firm ID Analytics. Fortunately, there are steps that you can take to discourage identity thieves from targeting a deceased loved one.

 

Part of the reason the deceased make prime targets for scam artists is that it can take up to six months for credit agencies to be notified about a death. As soon as possible, you should send copies of your loved one's death certificate through certified mail to the three major credit reporting agencies—Equifax, Experian, and TransUnion. Along with a certified copy of the death certificate, you should include papers certifying that you are the executor or person representing the deceased; the decedent's full name, date of birth, and Social Security number; the decedent's most recent address; and the date of death. You should also request that the credit bureaus put a "deceased -- do not issue credit" alert on the decedent's credit files.

In addition, you should send copies of the death certificate to any banks, insurers, credit card companies, or other financial institutions where the deceased had accounts. You should also cancel the decedent's driver's license by notifying the state motor vehicles department.

One way that identity thieves find victims is by looking through obituaries. When writing your loved one's obituary, try to avoid information that might be useful to identity thieves such as date of birth, mother's maiden name, or the decedent's address. Think about what information someone would need to open a bank account and avoid including that in the obituary.

Once the proper agencies and institutions have been notified, you should continue to monitor the decedent's credit report for a year to make sure there are no problems.  A free copy of the three credit agencies’ reports is available annually to executors or trustees.  Go to: www.annualcreditreport.com.

For more information from Bankrate about protecting a deceased relative from identity theft, click here.

The Obligations of a Fiduciary

When you need someone else to care for money or property on your behalf, that person (or organization) is called a fiduciary.  A fiduciary is a person or entity entrusted with the power to act for someone else, and this power comes with the legal obligation to act for the benefit of that other person.

Many types of positions involve being a fiduciary, including that of a broker, trustee, agent under a power of attorney, guardian, executor and representative payee. An individual becomes a fiduciary by entering into an agreement to do so or by being appointed by a court or by a legal document.

Being a fiduciary calls for the highest standard of care under the law. For example, a trustee must pay even more attention to the trust investments and disbursements than for his or her own accounts. No matter what their role is or how they are appointed, all fiduciaries owe four special duties to the people for whom they are managing money or resources. A fiduciary’s duties are:

• to act only in the interest of the person they are helping;
• to manage that person's money or property carefully;
• to keep that person's money and property separate from their own; and
• to keep good records and report them as required. Any agent appointed by a court or government agency, for example, must report regularly to that court or agency.

Remember, your fiduciary exists to protect you and your interests. If your fiduciary fails to perform any of those four duties or generally mismanages your money or affairs, you can take legal action. The fiduciary will probably be required to compensate you for any loss you suffered because of his or her mismanagement.