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Identity theft.  Two words to create instant dread in the mind of anyone – clutching your wallet close won’t help at all.  Unfortunately, the risk of identity theft doesn’t even stop at death.  According to the IRS thieves steal the identities of nearly 2.5 million deceased American each year.  The thieves will pretend to be the deceased person to gain access to their account, or apply for loans, credit cards, even jobs.   One Ohio family recently lost $2.2 million from their deceased fathers’ estate to thieves. 

So what can you do to protect yourself and your loved ones?

When handling an estate, the IRS suggests doing four things to prevent anyone from claiming the deceased’s identity:

  1. Send the IRS a copy of the death certificate. This is used to flag the account to reflect that the person is deceased.
  2. Send copies of the death certificate to each credit reporting bureau asking them to put a “deceased alert” on the deceased’s credit report.
  3. Review the deceased’s credit report for questionable credit card activity.
  4. Avoid putting too much information in an obituary, such as birth date, address, mother’s maiden name or other personally identifying information that could be useful to identity thieves.

More information to help you guard against identity theft is available at IRS.gov, enter “ID Theft” in the search box. More tips to help protect a deceased person’s identify can also be found on the IDTheftCenter.org website, type “deceased” in the search box.

In addition to the steps above, you should take two additional steps:

  1. Notify the DMV, providing them with a copy of the death certificate
  2. Remove the deceased’s name from any joint accounts.

Seeing your spouse’s name on financial accounts can be a comforting familiarity, but it is also puts the life you’ve built together at risk of identity theft. 

One final thought: consider the additional financial risk you put your family in by letting your estate go through probate.  Probate, like most court matters are public records – anyone can go to the courthouse, or now, access that information online, and see exactly who is inheriting bank accounts, real property.  All the details of your assets are exposed for anyone who bothers to look, as well as the name and address of who is inheriting your estate.  However, when you use a living trust, your estate and beneficiaries remain confidential, and are not handled through the court at all.

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