Millions of Americans have to deal with the headache of identity theft every year. Even though it may not result in the loss of money, identity theft can cause you to spend a lot of time and effort resolving the situation. Now, a new study shows that identity thieves even steal the identity of the deceased, often causing difficulties during the estate settlement process. The study reports that about 2.5 million deceased Americans have their identity stolen every year, as do another 800,000 fatally ill and hospitalized people. Though you cannot guarantee that identity theft will never happen to you or to a deceased relative, you can take steps to limit its chances.
Step 1: Use powers of attorney to limit access to information.
Identity thieves use sensitive information to open new accounts and lines of credit. If you have an elderly family member who is staying in a nursing home, nursing home staffers may have access to sensitive information in some situations. You can limit this access by having the elderly person use a financial power of attorney to grant someone else the authority to manage their finances.
Step 2: Appoint a good executor.
After a person dies, the executor is responsible for managing all of the estate property and settling all estate debts. A good executor will know who needs to be notified about the person’s death, as well as what steps to take in notifying creditors. If a creditor later comes and claims that the deceased person has opened an account and incurred a debt, the executor will know how to prove that the debt is fraudulent and can reject the claim.