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Protecting Identity and Assets After the Death of a Loved One

What Happens to Your Social Security Number When You Die?

Even if you have an up-to-date estate plan, there are some logistical quirks to be aware of whenever someone passes away. Clients frequently ask if they need to notify the Social Security Administration of the loved one’s passing. The short answer is “no.”

When a person dies, their death is verified by the Medical Examiner (in other states it may be a coroner or similar authority). That verification is documented by the formal death certificate, which is processed by the state’s Department of Vital Statistics.

Once the death certificate is processed and issued by Vital Statistics, Vital Statistics notifies the Social Security Administration that the person has passed away. This allows the Social Security Administration to update the SSA Death Master File with the deceased individual’s name and social security number. A deceased person’s social security number can no longer be used in transactions, which is why bank accounts in the deceased person’s name are often frozen shortly after their passing. Direct deposits will not go through, and automatic payments will also be stopped, often even without the bank being notified by the family.

In theory, inactivating a deceased individual’s social security number and freezing his or her accounts reduces the potential for fraud and identity theft. However, some transactions may still occur during the time after the person has passed away but before the death certificate has been issued. This can be problematic and later require that the Estate or Trust pay money back to the Social Security Administration or pension custodian for payments that were made after death. Still, it is best to be patient, give the processes time to work, and avoid confusing the issue by contacting the Social Security Administration.

Chelsea Riekkola
Partner, Foley & Pearson, P.C.

“Who Should be Notified After a Loved One’s Death”

As Chelsea mentioned in her article above, one of the reasons that bank accounts are frozen after the financial institutions have received notification of death is to protect against identity theft and fraud. The custodians will want to reduce the risk of unauthorized activity occurring in the deceased’s accounts. Another way of reducing the risk of identity theft is to contact all three credit reporting agencies to notify them of your loved one’s death. The credit reporting agencies will likely require a copy of the death certificate to freeze the deceased individual’s accounts. You may also want to request a copy of the individual credit reports at this time, which may require other legal documents. Here are the websites for the three credit reporting agencies, as their processes are continually changing and hopefully moving more online.

Equifax – https://www.equifax.com/

Experian – https://www.experian.com/

TransUnion – https://www.transunion.com/

While notifying the credit reporting agencies will help protect against fraud, we highly recommend consulting your attorney prior to paying any creditors or settling any debts. Lean on your team for help: your attorney, tax advisor, and financial advisor can be very helpful in coordinating and assisting with the many items that must be completed in the difficult time after losing a loved one.

Kim Butler, CFP®
Financial Advisor

Our guest author this week, Chelsea Riekkola, is a partner at the estate planning law firm Foley & Pearson, P.C. Chelsea was born and raised in Alaska, she received her J.D. from the University of Oregon, with a focus on estate planning and probate law. She is published in the American Bar Association Journal of Real Property, Trust and Estate Law on handling digital assets after death. You can learn more about Chelsea and Foley & Pearson, P.C. by visiting their website.


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