Ashley Kimler | (TNS) Bankrate.com
Grieving the loss of a loved one can be emotionally and mentally difficult. Nonetheless, it’s important to manage the deceased’s financial affairs and safeguard their credit information during the grieving process. A critical first step is to request a credit freeze.
By taking these steps, you can protect the deceased’s financial status and prevent potential fraud or identity theft for yourself and other family members.
Why a credit freeze is needed after a loved one’s death
A credit freeze acts as a lock on the individual’s credit report, making it more challenging for identity thieves to use their details for fraudulent activities.
When a loved one dies, their financial information becomes vulnerable. Freezing their credit will help to:
—Prevent identity theft
—Prevent unauthorized opening of new accounts in their name
—Safeguard sensitive information
Without a credit freeze, the deceased’s personal data such as their Social Security number (SSN) could be stolen and misused to open credit cards or other financial accounts. Some criminals exploit obituaries, death certificates, and other details to steal the identities of deceased individuals. They may open new accounts or commit crimes using the deceased’s identity, causing problems for the surviving relatives.
Freezing credit makes it significantly tougher for criminals to open new accounts or misuse existing ones.
How to report a death to the credit bureaus
Initiating a credit freeze for a deceased family member involves a few simple steps:
1. Collect the deceased’s personal information
Before informing the credit bureaus of the death, you’ll need to gather specific information and paperwork:
—The full legal name of the deceased individual as it appears on official documents.
—The deceased person’s SSN, which is essential for identifying their credit file.
—The deceased individual’s date of birth.
—The date of the individual’s death.
—A copy of the death certificate.
If you are the spouse or shared a credit file with the deceased, your own identification may also be necessary.
If you are not the spouse, you may need to provide evidence that you are authorized to act on behalf of the deceased, such as a copy of a will, executor agreement, or power of attorney documentation.
Having this information readily available will ensure a smooth and efficient process when contacting the credit bureaus.
2. Send letters to inform the credit bureaus
The three main credit bureaus,Transunion, Equifax and Experian, must be informed of the death. The first bureau you contact will notify the other two on your behalf.
However, one bureau may not be able to initiate a credit freeze across all three bureaus. Therefore, you should contact all three bureaus and send copies of all necessary documents with each letter.
Use this simple template to inform the credit bureaus of the death and request a credit freeze:
[Your Name]
[Your Address]
[City, State, Zip Code]
[Your Phone Number]
[Date]
[Credit Bureau’s Name]
[Credit Bureau’s Address]
[City, State, Zip Code]
Subject: Notice of Death and Request for Credit Freeze
To whom it concerns,
I am writing to let you know that [Name of Deceased], [relationship to me, for example, my partner], has passed away on [Date of Death]. I ask that you freeze [his/her] credit report to prevent any potential fraud or unauthorized access.
I have included a copy of [Name of Deceased]’s death certificate for verification. Please freeze [his/her] credit report and label it as “deceased — do not issue credit.”
I also request a final copy of [Name of Deceased]’s credit report for my records.
Thank you for attending to this matter promptly. Please confirm with me once you have received the notification and frozen the credit.
Sincerely,
[Your Name]
You can customize this template and include any information relevant to your situation. Remember to keep a copy for your records.
Once you’ve drafted your letter, you can send it to one or all of the major credit bureaus via postal mail. Make sure to attach copies of identifying documents and send each letter via certified mail.
The correct contact addresses for informing credit bureaus of a death are as follows:
Transunion, P.O. Box 2000, Chester, PA 19016
Experian, P.O. Box 9701, Allen, TX 75013
Equifax Information Services LLC, P.O. Box 105139, Atlanta, GA 30348-5139
Timeframes for the credit freeze may differ. Transunion The individual’s credit report will be updated within five days of receiving the documents, and you will be sent a confirmation letter. Experian A death notice will be added to your loved one’s credit report upon receiving notification from the Social Security Administration or the requester. Equifax A death notice will be added to your loved one’s credit report upon receiving the documents.
3. Confirm the freeze and ensure the account is flagged as deceased
After sending your request to the credit bureaus, confirm that they have initiated the credit freeze and properly flagged the deceased individual’s account:
—Allow some time for the credit bureaus to process your request. This usually takes a few days or up to a couple of weeks.
—Reach out to each of the three major credit bureaus — TransUnion, Experian, and Equifax — either by phone or online.
—Ask them to confirm that they have received your request to freeze the deceased individual’s credit report.
—Ask if the deceased’s account has been appropriately labeled as “deceased — do not issue credit” to protect their information from potential fraud.
5. Request a copy of your loved one’s credit report
While communicating with the credit bureaus, you should also request a copy of your loved one’s credit report. This will confirm that the report has been marked “deceased” and that a permanent credit freeze is in place.
You can also use the credit report to assess your loved one’s financial standing. Carefully review the credit report to identify any discrepancies, outstanding accounts, and make a note of any accounts that require your attention.
How to handle your loved one’s financial matters
Once you’ve taken steps to freeze the credit, it’s important to address your loved one’s outstanding financial responsibilities.
You might take on some of their debts if you are their husband, wife, or recipient. Whether you are responsible to repay those debts depends on the rules of the accounts and the laws in your state. In some situations, the transfer of debt responsibility when the person dies cannot be avoided.
For example, if you and your loved one had debts together, such as mortgages or shared credit card accounts, you may have to pay for them, regardless of who made the charges. Similarly, if someone cosigned a loan or credit card for the deceased person, they will be responsible for that debt.
If the person who died had a home equity loan on a house that is inherited, the heir must repay it. Timeshares and their maintenance fees will also be the responsibility of the heirs if their names are on the deed.
Family members who approved medical treatment may have to cover any medical bills that are not covered by insurance, depending on state laws and the terms of the documents.
Get in touch with the creditors of your loved one to:
—Close accounts
—Handle tax paperwork
—Resolve any outstanding balances
In some cases, accounts may be automatically closed when a person dies. However, some accounts may still need to be settled, either partially or completely, even after the account holder has died.
The bottom line
Taking steps to freeze the credit of a deceased loved one is an important measure to protect their financial legacy. By taking the appropriate actions and organizing important documents, you can protect their private information and deal with financial matters with as little stress as possible.
Take each step carefully — and seek professional help if necessary — to respect the financial well-being of your loved one even after they have passed away.
Frequently asked questions
—How do you close your deceased relative’s accounts?
Make several copies of the death certificate and inform each relevant person with this evidence. Request closure of the accounts and settle any overdue balances as needed. While waiting for a credit freeze to take effect with the credit bureaus, monitor your relative’s credit reports for any fraudulent activity.
—Do you need to inform the IRS when someone dies?
Yes. When someone dies, you or the authorized representative must file the deceased person’s final tax return. On this return, you must indicate the person’s death. Currently, the IRS does not require any other notification of the death, but it is always advisable to check irs.gov for the most current tax information.
—Can a credit freeze be lifted temporarily, such as for estate-related transactions?
A credit freeze can be temporarily lifted upon request. However, lifting a freeze can expose the account holder’s credit information to the risk of fraud.
(Visit Bankrate online at bankrate.com.)
©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.
