When you lose a loved one, identity theft is probably the furthest thing from your mind. Clearly, it’s not an issue that you want to or should have to concern yourself with when a family member dies. Unfortunately, identity theft after death is a growing problem. According to the American Association of Retired Persons (AARP), the identities of more than two million deceased Americans are hijacked each year. Their personal information is used for many purposes, including to:
- Open credit card accounts
- Apply for loans
- Purchase cell phone plans
- Open other service accounts
In some cases, identity thieves even file tax returns under the deceased’s social security number, diverting refunds to the fraudsters.
Taking Steps to Prevent Identity Theft after the Death of a Loved One
One reason some identity thieves target the deceased is that there is typically a post-death period in which no one is watching. Credit bureaus, the IRS, and others may not yet have received news of the deceased’s passing, or may not have updated their records. Family members don’t often think to monitor the deceased’s credit report. As a result, there is a window—often of several months—in which it can be relatively easy for identity thieves to slip by any safeguards.
The Internal Revenue Service (IRS) makes these recommendations:
- Send the IRS a copy of the death certificate. Often, the executor won’t notify the IRS that the deceased has passed away until tax returns are due, but by that time, the damage may be done.
- Send a copy of the death certificate to each of the three major credit bureaus. Most people never think to take this protective measure, but placing a “deceased alert” on each of these three credit reports will greatly increase the likelihood that fraudulent attempts are identified before accounts are opened.
- Be cautious about the information included in the obituary. Identifying information such as the deceased’s birthdate, address, and maiden name in a published obituary can provide identity thieves with the information they need for fraudulent applications.
- Monitor the deceased’s credit report. Tracking credit activity just as you would with regard to your own credit history will help to ensure that any attempt at stealing the deceased’s identity is quickly recognized and addressed.
The Social Security Administration (SSA) should also be promptly notified of the deceased’s passing. Further, the next of kin or executor should immediately provide the deceased’s financial institutions with a copy of the death certificate. While the executor will contact these institutions and take over possession of accounts as part of the probate process, it may be too late. Sadly, theft of existing bank accounts and other property after death is often perpetrated by friends or family members. That means the theft may take place in the immediate wake of the death, before the probate process is even underway.
Why Identity Theft after Death Matters
Though identity theft targeting the dead is morally offensive and may have an emotional impact on relatives and beneficiaries, many question the practical impact of this type of identity theft. After all, the deceased relative isn’t around to be held responsible for the debts, and family members generally aren’t responsible for debts of the deceased.
Ensuring that your deceased loved one’s identity remains secure matters. Debts opened in the deceased’s name shortly after death may show up as debts for the executor to settle. The executor may not realize that the debts are illegitimate, meaning that assets intended for the heirs may be diverted to these fraudulent debts. Even if the executor immediately recognizes the fraudulent debts, establishing that they are not valid claims against the estate may eat up both time and money.
Thus, it is in everyone’s best interests to ensure that the IRS, the Social Security Administration, the three major credit bureaus and the deceased’s financial institutions are informed of the death as soon as possible.