Baby boomers know they need to protect their identity. So they shred documents, hide passwords and guard Social Security numbers.
But what many don't know, and what many of their advisors don't know, is that they probably need to extend their identity theft protection efforts to their estate plan and also to their health care arrangements.
Identity thieves are getting information about people in places where there is trust and especially where people are vulnerable, explains Adam Levin, chairman of Identity Theft 911, Scottsdale, Ariz. and former consumer affairs director for the state of New Jersey.
For instance, thieves are targeting people who have just died and whose homes and mailboxes are filled with personal information that make identity theft possible, he says. Some also obtain personal data from health care environments.
The estate issues are not something many people know about, says Levin.
In the case of sudden death, for instance, the bereaved usually has not had time to prepare or think of contingencies, he says. Furthermore, the family will be feeling grief, arranging the funeral, preparing for out-of-town guests, and otherwise preoccupied. They will not be thinking of notifying the credit card companies or bureaus, and they will not be expecting that the deceased's identity could be stolen and used for fraudulent purposes.
That lack of attention opens up possible access to information and data about the person, with the result that some thieves "just crawl into the life of the deceased," says Levin.
Example: As this was being written, reports in the New York Times and other media said two men in their 60s had just been arrested for attempting to cash a Social Security check of another 60-year-old man who had just died of natural causes.
Donald S. Hardy, founder and owner of Quantum Benefits.com in Atlanta, said he is aware that some people will use the Social Security number of a deceased person when applying for a job or insurance. For that reason, he says, data on applications are routinely verified–the Social Security number, phone, address, birthday, etc. In addition, as part of financial planning, he educates customers on identity theft and shows them how to obtain credit reports and/or sign up for identity theft monitoring services.
But, up to now, he has not been carrying this over to his estate planning services–"I haven't but I should," he says.
The estate issues can extend beyond the funeral. It takes time for creditors to catch up to the fact that the person has died, Levin points out. It also takes time for the family or executor to gather all the bills, sort through the important ones, and make the related decisions. While this is going on, if they leave unshredded bills in the home, thieves may be able to break in and get that information, he says.
If the time lag is long enough, he warns, the thieves can use this information to apply for credit in the name of the deceased, without the creditors or family ever knowing. "They can get credit without a photo ID or Social Security card," he explains.
Some also try to apply for a 2nd mortgage, buy a motor vehicle, or purchase exotic vacation tickets, he says. Or they try to pilfer the deceased's bank accounts.
Another opening for thieves occurs when filing for probate, Levin says. "Here, the Social Security number becomes equivalent to a public record, and the thieves can also get access to information on the surviving spouse, because some states make that information available."
The other growing identity theft concern involves theft of personal information from health care settings, Levin continues.
"People in hospitals and other care settings have access to the information and they sometimes move on it as soon as the person dies. This includes administrative people as well as care providers. "Some crooks pay for the records … and then use the information to file false medical claims, or to enable someone to get care in the name of the victim."
