Search
Close this search box.
Search
Close this search box.

How to safeguard the credit of a loved one who has passed away

During the difficult grieving process, it’s crucial to handle the deceased’s financial matters and safeguard their credit information. Requesting a credit freeze is a crucial initial step.

Ashley Kimler | (TNS) Bankrate.com

Dealing with the loss of a loved one is emotionally and mentally difficult. However, it's important to handle the financial matters of the deceased and protect their credit information amid the upheaval of grieving. Taking steps to freeze their credit is a crucial initial action.

By following this process, you can protect their financial status and safeguard yourself and other loved ones from potential fraud or identity theft.

Why it's necessary to freeze the credit after the death of a loved one

Freezing the credit is similar to placing 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 passes away, their financial information becomes susceptible. Freezing their credit will help:

—Prevent identity theft

—Prevent new accounts from being fraudulently opened in their name

—Protect sensitive information

Without a credit freeze, the personal data of the deceased, including their Social Security number (SSN), could be stolen and used to open credit cards or other financial accounts. Some criminals exploit obituaries, death certificates, and other information to steal the identities of deceased individuals. They might open new accounts or commit other offenses under the deceased person's name, causing issues for surviving relatives.

Freezing the credit significantly hinders thieves from opening new accounts or misusing existing ones.

How to inform the credit bureaus of a death

Initiating a credit freeze for a deceased loved one involves a few simple steps:

1. Gather the personal information of the deceased loved one

Before informing the credit bureaus about the death of a loved one, you'll need to gather specific information and documentation:

—The complete legal name of the deceased person as it appears on official documents.

—The deceased person’s SSN, which is vital for identifying their credit file.

—The date of birth of the deceased person.

—The date of death of the individual.

—A copy of the death certificate.

Your own identification may also be necessary if you are the spouse or shared a credit file with the deceased.

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 notify the credit bureaus

The three major credit bureaus, Transunion, Equifax, and Experian, should be informed of the death. The first bureau you notify will inform the other two on your behalf.

However, one bureau may not necessarily initiate a credit freeze across all three bureaus. Therefore, you should contact all three and send copies of all necessary documents with each letter.

Use this simple template to notify the credit bureaus about the death of your loved one 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 Credit Freeze Request

To whom it may concern,

I am letting you know that [Name of Deceased], who was my [relationship to you, e.g., spouse], has passed away on [Date of Death]. I ask that you stop any potential fraud or unauthorized access by freezing [his/her] credit report.

I have included a copy of [Name of Deceased]’s death certificate as evidence. Please freeze [his/her] credit report and label it as “deceased — do not issue credit.”

I also want to request a final copy of [Name of Deceased]’s credit report for my records.

Thank you for acting quickly on this matter. Please confirm with me when you receive the notification and when the credit freeze is in place.

Sincerely,

[Your Name]

You can personalize this template and include any relevant information for your situation. Remember to keep a copy for your records.

Once you have written your letter, send it to one or all of the major credit bureaus by postal mail. Remember to enclose copies of identifying documents and send each letter by certified mail.

The appropriate contact addresses for notifying 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

The time taken for the credit freeze may vary. Transunion will update the individual’s credit report within five days of receiving the documents and send you a confirmation letter. Experian will add a death notice to your loved one’s credit report upon receiving notification from the Social Security Administration or the requestor. Equifax will add a death notice to your departed’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 marked the deceased individual’s account:

—Give the credit bureaus some time to process your request. This usually takes a few days or up to a couple of weeks.

—Contact each of the three major credit bureaus — TransUnion, Experian, and Equifax — either by phone or online.

—Ask them to verify that they have received your request to freeze the deceased individual’s credit report.

—Ask if the deceased’s account has been properly marked 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 you are in contact 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 evaluate your loved one’s financial situation. Read the credit report carefully to identify any discrepancies and all outstanding accounts, and note any accounts that need your attention.

How to settle your loved one’s financial affairs

After freezing the credit, it’s important to manage your loved one’s outstanding financial obligations.

You might take on some of their debts if you’re their spouse or beneficiary. Whether you’re responsible to repay those debts depends on the terms of the accounts and your state’s laws. In some cases, a transfer of debt responsibility upon death is unavoidable.

For example, if you shared debts with your loved one, like mortgages or joint credit card accounts, you could be accountable for them, regardless of who made the charges. Likewise, if someone acted as a cosigner for a loan or credit card for the deceased, they’ll be liable for that debt.

If the deceased had a home equity loan on an inherited house, the heir would have to repay it. Timeshares and their maintenance fees will also fall on heirs if their names are on the deed.

Family members who authorized medical treatment may have to pay any uncovered medical bills, depending on state laws and document terms.

Contact your loved one’s creditors to:

—Close accounts

—Manage tax paperwork

—Settle outstanding balances

In certain situations, accounts may be closed automatically when a person passes away. However, some accounts may still require settlement, either partially or fully, even after the account holder’s death.

The bottom line

A credit freeze for a deceased loved one is a crucial step to safeguard their financial legacy. By taking the right steps and organizing important documents, you can safeguard their private information and handle financial matters with minimal stress.

Take each step with care — and seek professional assistance if needed — to honor your loved one’s financial well-being even after they’re gone.

Frequently asked questions

—How do you close your dead relative’s accounts?

Make multiple copies of the death certificate and notify each of your relatives with this proof. Request account closure and settle any past-due balances when necessary. Monitor your relative’s credit reports for fraud while you’re waiting for a credit freeze to take effect with the bureaus.

—Do you need to notify the IRS when someone dies?

Yes. When someone dies, you or the appointed representative need to file the deceased person’s final tax return. On this return, you must indicate the person’s death. At present, the IRS doesn’t require any other notification of the death, but you should always look to irs.gov for up-to-date 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 fraud risk.

(Visit Bankrate online at bankrate.com.)

©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments