Prepare for the Unexpected
We normally don’t like to think about the topic of death, especially our own or the death of loved ones, however not being prepared can create huge burdens for those left behind. It can be incredibly difficult to deal with your grief while trying to sort out a loved one’s personal life and settle their estate. Even worse are disputes that often arise between family members regarding funeral arrangements, distribution of personal items, and any assets. The term “estate planning” may conjure images of mansions, yachts and fancy cars, but for most of us being prepared does not have to be complicated or expensive. The primary purpose of an estate plan is to legally document who you want to receive specific assets (items or money). One major benefit of having an estate plan is to minimize an expensive and prolonged legal process called probate. The laws governing probate vary from state to state but it can be an expensive and time consuming legal process if there is no will. Another major benefit of having an estate plan is that it avoids disputes between family members since the individual’s wishes are clearly spelled out and documented. The first step is to get all of your personal and financial documents organized and in a safe place that is known to the executor. An executor is someone who is given legal responsibility to carry out your wishes and resolve any outstanding financial obligations. Important documents may include Social Security card, birth certificate, marriage certificate, divorce decree, list of children with addresses, financial records (i.e. mortgage statements), life insurance policies, car titles, to name a few. The second step is to assemble the legal documents that will make up your estate plan which may include a will, living will, trust, and health care, general or durable power of attorney documents. One of the greatest gifts you can leave to your loved ones is an estate plan, so don’t procrastinate until it is too late.
Digital Life After Death
Historically the major items to handle upon the death of a loved one were the funeral arrangements and the will. Now a person’s digital life is a major item with potentially disastrous consequences if not handled correctly. According to a 2014 Pew Research Center study, a little more than half of all internet users age 65 and older have profiles on social networking sites. About three Facebook users die every minute. What happens to their pictures, status updates, etc. when they are no longer around?
Example: Mrs. Johnson’s husband died suddenly of a heart attack and she soon realized that she had no legal right to access her husband’s online accounts like email, Facebook, LinkedIn, Twitter, and his digital photo repository. To make matters worse some of his accounts were hijacked and his identity was stolen. It will probably be several years before politicians figure out what laws to write and each provider (i.e. Facebook) has different policies regarding this issue. One strategy to solve this problem is to create a digital asset plan that contains all of your account details including account name, user name, password, and clear instructions explaining what you want done with each account. This document would be referenced in your will but not made part of your will. This is because your will and its attachments become public during the probate process. Also, ensure this document is up to date or it may be worthless. Another concern is identify theft of the deceased. According to AARP about 2.5 million deceased persons information are used to obtain credit cards, loans, cellphone service, and even file tax returns. Identity thieves troll obituaries for name, address and date of birth which they use to purchase social security numbers. This is called ghosting and may not be detected for six months or more when the credit reporting bureaus, financial institutions and Social Security finally share information. Here are some suggested prevention steps:
• List age instead of date of birth and do not list address in the obituary.
• Send death certificates to financial institutions and request the account be listed as “Closed. Account holder is deceased”.
• Notify Social Security (1-800-325-0778 M - F 7am - 7pm) and Texas DMV (512-424-2600) to remove their social security and driver’s license numbers from circulation.
• Mail, using “return receipt”, death certificates and request the account be flagged “Deceased. Do not issue credit” to the three major credit bureaus:
Experian, P.O. Box 4500, Allen, TX 75013
Equifax Information Services LLC, Office of Consumer Affairs, P.O. Box 105139, Atlanta, GA 30348
TransUnion LLC, P.O. Box 2000, Chester, PA 19022
• Check the deceased’s credit reports about three months later to ensure accounts have been flagged and there is no suspicious activity (annualcreditreport.com).
Estate planning can be intimidating but it doesn’t need to break the bank. There are a number of free resources that can help you learn the basics, what documents you may need to assemble and how to best to go about getting that done. Some of those resources include:
National Institute on Aging (https://www.nia.nih.gov/health/publication/getting-your-affairs-order#legal)
National Elder Law Foundation (http://www.nelf.org/resources/articles/estate-planning)
National Hospice and Palliative Care Organization (http://www.caringinfo.org/i4a/pages/index.cfm?pageid=1)
Texas Law Help.org (http://texaslawhelp.org/issues/elder-law/estate-planning)
Many employers have an Employee Assistance Program that may offer free initial legal and financial consultations. Discounted rates may be available if you need additional legal assistance.
This article is not legal advice so don’t hesitate to consult with a professional to obtain legal or financial advice your needs dictate.