Identity theft is becoming more and more common, more common than one would think. According to the U.S. Department of Justice, about twelve million (12,000,000) people have their identity stolen annually, resulting in financial losses totaling twenty-five billion ($25,000,000,000.00). Identity theft includes the compromising of one’s existing credit cards, existing bank accounts and personal information to obtain credit and establish bank accounts. To protect yourself from potential identity theft, you need to be very cautious and protective of your personal information. This article will provide general safeguards to follow to protect yourself and your information as well as provide you with steps to take in the unfortunate event that your identity or information is compromised.
Protecting your personal information and accounts is vital. Never carry your Social Security Card with you. Every credit card, bank account and phone account should be password protected or assigned a PIN (personal identification number). When selecting a password or PIN, avoid using information such as your mother’s maiden name, your social security number, birthdates, phone numbers, etc. Be sure to secure your personal information in your home, away from roommates, household employees and other outside contracted parties. Never give personal information on the phone, internet or mail if you have not initiated the contact. Protect your incoming and outgoing mail by immediately collecting your mail when it arrives and mailing your letters at the post office or post office box rather than from your home mailbox. Shred any documents such as charge receipts, credit applications, insurance forms, medical statements, checks, bank statements, expired credit cards, and credit offers you receive in the mail. If you use the internet, protect your computers with virus protection and firewall software. When purchasing items through the internet, be sure to use a secure web browser. If you own a laptop or mobile device, avoid storing personal and financial information on those devices. However, if it is necessary to store information on these devices, be sure to protect those devices with strong passwords to make it difficult for someone to access your information in the event that the device is lost or stolen.
WHAT TO DO IF YOUR IDENTITY WAS STOLEN
If your identity is stolen, be sure to report the fraud by filing a report with your local police department. In addition, report the fraud by calling the security or fraud department of each your credit card companies. It is also important to also notify the credit card companies in writing via certified mail with return receipt requested. Be sure to save your correspondence and never send any originals of any pertinent documents such as police reports.
If your bank checks are stolen or if someone opens up a bank account in your name, notify the bank immediately to put stop payments on the missing checks and cancel any existing accounts. You should also contact the major check verification companies: TeleCheck, Certegy, Inc. and International Check Services and call SCAN at (800) 262-7771 to find out if anyone is writing bad checks in your name.
Place a fraud alert on your credit reports by contacting Equifax, Experian and Trans Union. Fraud alerts can help prevent an identity thief from opening additional accounts in your name. You can also place a security freeze on your credit report which prevents third parties from accessing your credit report without your express authorization.
WARNING SIGNS OF IDENTITY THEFT
Be sure to obtain and review your credit reports regularly. If there are accounts that were not opened up by you, it is likely that you are a victim of identity theft. You can download your free credit reports online at www.annualcreditreport.com. If you notice that you are no longer receiving your bills, statements or other mail, follow up with your creditors to see if someone has taken over your account by changing your billing address. If you receive a credit card that you did not apply for, immediately contact that credit card company to inquire about how the card was applied for. If you are being denied credit or being offered credit with less favorable terms than usual, and likewise, if you begin to get calls or letters from debt collectors for accounts that you are not aware of you may be a victim of identity theft. If you think your identity has been stolen, you may want to call a consumer law attorney for legal advice.
RESOURCES IF YOUR IDENTITY IS STOLEN
Equifax: (800) 525-6285 or www.equifax.com
Experian: (888) 397-3742 or www.experian.com
Trans Union (800) 680-7289 or www.transunion.com
Free Credit Reports: www.annualcreditreport.com
TeleCheck: (800) 710-9898
Certegy, Inc.: (800) 437-5120
International Check Services: (800) 631-9656
Check Systems: (800) 428-9623
Office of the Illinois Attorney General Identity Theft Hotline: (866) 999-5630
In my last article, I wrote about Estate Planning 101. While it is important for one to have a Will, Trust, Living Will and/or Powers of Attorney for Property and Health Care, with the Digital Age that we live in, it is equally important for one to address one’s digital footprint and assets that he will leave behind after his death. When I mention one’s digital footprint and assets, I am referring to his personal computers, cell phones, tablets, email accounts, online banking accounts, web sites, online storage and sharing accounts such as Dropbox, Google Drive, One Drive, social media accounts such as Facebook and Twitter, etc. While these digital footprints and assets are so personal, after one’s death, accessing these accounts and/or removing these accounts after one’s passing is often troublesome. And, as I discussed in a previous article about identity theft of living individuals, identity theft of deceased persons’ information is also on the rise with more than 2.5 million deceased identities being abused annually. By taking action now, one can make the process for one’s loved ones of accessing these accounts and removing these accounts after his passing a little easier.
One should write down any usernames and passwords required to access one’s computers, cell phones and tablets and take an inventory of documents stored on these devices. Often, in the paperless age that we live in, people scan documents as PDFs and store these files on their computer. These documents may be important information such as bank account statements, investment account statements, insurance policies, retirement account statements, etc. An executor of a will or a trustee of a trust may need the usernames and passwords to these devices to access these documents if these documents are not available in an original or other hard copy in order to administer the estate.
One should also take an inventory of his digital assets by writing down all of his online accounts, usernames and passwords. Online accounts include email accounts, web site accounts, online bank accounts, online investment accounts, online social media accounts, online data storage accounts, online photo storage accounts, etc. Next, one should designate an individual to be a digital executor and should be explicit about what he wants to happen with his digital assets. One should not assume that his survivors automatically have the right to those digital assets. One can include specific bequest language in the body of his Will or include language incorporating by reference the existing inventory, leaving assets to specific heirs. The list of digital assets should NOT be attached to the Will, but only incorporated by reference in the Will noting its location because a Will is a public record.
If you have a Will or Trust but have not addressed how you want your digital assets addressed, you should contact your estate planning attorney to include plans for your digital property in your estate plan. Make sure your estate plan specifies your wishes about your property and appoints someone to act on your behalf with respect to all of your digital property, during incapacity and after death. This may be accomplished via a Power of Attorney, a Will, and a Revocable Trust. And, make sure that your estate planning documents explicitly authorize the companies that hold your electronic data to release that data to your fiduciaries during your incapacity and after your death.
Many people make the mistake by not planning for the inevitable. Benjamin Franklin once said "The only things certain in life are death and taxes.” Estate planning is a process whereby a person can make legal arrangements while he is alive to manage and transfer his assets during his lifetime and after his death with goals to minimizing taxes and for providing for the future of his descendants and other loved ones. Estate planning also allows one to provide for the personal care and management of property during one’s lifetime should that person become incapacitated while he is alive. The basics of every good estate plan consist of a Will, Living Trust, and Powers of Attorney for both Health Care and Property. These basic tools will allow one to efficiently and effectively manage and transfer his property both during his lifetime and after his death to minimize taxes while providing for the future of his descendants and loved ones and to provide for the personal care and management of property during one’s lifetime should that person become incapacitated while he is alive.
Passing away without a Will is known as dying “intestate.” Should this happen, the division of one’s assets will be decided under the Illinois probate laws. If one passes away with a valid Will, the division of assets will be controlled by the specific provisions of the Will and makes the appointed Executor responsible for making sure those wishes are carried out. Generally, a Will’s purpose is threefold. First it provides for one’s beneficiaries - those who will get property of the estate. Second, it appoints an Executor - one who will administer the estate. And third, if applicable, it may appoint a Guardian who will provide and care for one’s minor children.
There are three types of Wills. First, an Outright Will provides for gifts to be made outright to the beneficiaries at death in the absence of any type of Trust. Second, a Will With a Testamentary Trust is used when one wants to leave gifts in Trust for his beneficiaries in the absence of a Revocable Living Trust. And third, a Pour Over Will is used along with the creation of a Revocable Living Trust. Assets not titled in one’s Trust is transferred to the Trust to be disposed of within the Trust. The most commonly used are the first and third and the second is highly not recommended.
With the creation of a Will, there are limitations. A Will cannot dispose property titled in Joint Tenancy or property with a valid beneficiary designation such as a life insurance policy. It cannot help your estate avoid probate thereby making the affairs of your estate public. It cannot effectively disinherit a surviving spouse. And, it cannot provide for management of your assets during disability or incapacity while you are alive. However, when used in conjunction with Trusts and Powers of Attorney for both Health Care and Property, some of these limitations can be dealt with effectively to achieve these goals.
Revocable Living Trusts
A Revocable Living Trust is a flexible and efficient estate planning tool for managing property during one’s lifetime and for disposing and managing assets after one’s death. It is a written property agreement where the Grantor transfers property to a Trustee for the benefit of the named Beneficiaries. Note that the initial Grantor, initial Trustee and the initial Beneficiary is the individual creating the trust. This is known as a Self Declaration of Trust. Once created, the Trust must be funded by transferring the individual’s personal assets such as real estate, bank accounts, stocks, bonds, etc. into the Trust. Once created and funded it becomes effective immediately. And during one’s lifetime, the Grantor remains in control of the assets and may change his beneficiaries, successor trustees and other terms of the trust. A named Successor Trustee will take over on behalf of the initial Trustee if the initial Trustee resigns, becomes incapacitated or passes away.
There are various advantages of having a Revocable Living Trust as opposed to just having an Outright Will or a Will With a Testamentary Trust, the main being that probate can be avoided allowing for a more efficient and private distribution and management of the estate's property. Other advantages include its flexibility, ease of making modifications, and the difficulty of being challenged by others. And since the Trust is effective while the Grantor is alive, should the Grantor become incapacitated, the Successor Trustee immediately steps in to take over and manage the assets of the Trust without having to go to court to have the Grantor declared disabled or incapacitated. Finally, Trusts are extremely flexible to address special circumstances such as subsequent marriages, special needs beneficiaries, estate tax issues, spendthrift and creditor risk beneficiaries, minor children or young adults incapable of handling their financial affairs and business assets.
The old proverb “Don’t be penny wise and pound foolish” is especially important to remember when planning your estate. Estate planning is a very complex area of law which no lay person should do on their own.
Gilbert R. Dizon is the Founder and Managing Attorney of the Geneva law firm of Dizon Law Ltd. He has over 19 years experience in Estate Planning, Business Law, Real Estate and Bankruptcy. His law firm is located at 524 W. State Street, Geneva, Illinois and the firm’s other areas of practice include Municipal Law, Personal Injury, Traffic, DUI and Criminal Defense. For more information, please call (630) 761-5670 for a free consultation.