6 steps to take if a credit card owner dies

When a loved one dies, the task of notifying financial institutions and closing accounts is sometimes delayed. But if credit card accounts are left open, problems can arise later. You should start by freezing a deceased family member’s credit. You will also need to collect some information and take action.

If you are a personal representative or steward of someone else’s property, you should take the following steps:

Contact the credit bureau to freeze your loan

Contact the three major credit bureaus (Equifax, Experian, and TransUnion) to request a loan freeze, which will prevent anyone from accessing your loved one’s credit case. Keep the following in mind:

• You can request a loan freeze at one credit bureau.. As soon as you do this, the other two bureaus will be notified. However, you should contact each of them to make sure they all received the death notice.
• You will need to send a copy of the death certificate and other documents of your loved one.
• You will also need to send a copy of your ID if you are not a spouse. As the responsible person, you will need to add proof of your permission to act on their behalf, such as a power of attorney.

The credit freeze prevents criminals from opening new credit cards or other accounts using the name and social security number of the deceased.

“You don’t want to deal with the identity theft of a loved one years after their death,” says Stephen Lesavich, founder and CEO of Lesavich High-Tech Law Group.

Access to accounts and request for documents

You might assume that with today’s technology, banks will know when someone dies, but that’s not the case.

“Survivors must act quickly to avoid legal or financial problems,” says Lesavich. “Death notice to a credit card issuer is not automatic, and credit cards are not automatically canceled upon death.”

The sooner you start organizing a person’s financial accounts, the better, says Robert Siciliano, CEO of identity theft website Safr.me.

As a court-authorized representative or surviving spouse, you may request a copy of the deceased’s credit report, which lists all credit accounts held in the deceased’s name. “Go through all of this person’s various closets, drawers and folders looking for bills and statements,” Siciliano says.

You will also need to monitor incoming mail for six months to a year after death.

Some financial institutions will ask for death certificates, so collect copies, including for three credit bureaus. Some states require both full and summary death certificates.

If the credit card is co-owned, the co-owner assumes full ownership.

“If the account is joint, they should not interrupt the use of the card,” says Betty Riess, a spokesperson for Bank of America. “If a co-owner has any questions about status, it’s always a good idea to contact the card issuer.”

It is also recommended that before canceling a credit card account, contact all authorized users on the account and remind them not to use their cards. Since the owner of the account who was in charge of payments is no longer there, any use of the account may cause problems for him.

Avoid using a credit card

Using a credit card that belongs solely to someone who has died is fraudulent, even if the person using the card was an authorized user or had permission to use the card prior to the cardholder’s death. “In this situation, the user may be liable for new payments and old debt,” says Lesavich.

In most states, if someone is an authorized user of a card owned by a deceased spouse, the survivor is not liable for the debt. However, in states with common property, creditors may pursue the surviving spouse. If the amount is significant and you are unsure whether the surviving spouse is required to pay, contact a real estate attorney in your state.

Be sure to destroy any credit cards associated with the account and ask authorized users to do the same. If you think someone else has credit card account numbers, tell them that the account cannot be used.

Notify card issuer

If the deceased family member was the sole owner of the account, contact the issuer and cancel the account as soon as possible. All credit card accounts must be closed immediately upon the death of the primary cardholder. Act quickly to avoid interest and financial fees.

Identity thieves look at obituaries and online records to learn about recent deaths so they can steal data from accounts or create new ones. Banks may send out late notices and charge additional fees if the next payment is missed.

Call your credit card issuer and ask for the deceased accounts department or look for one on the issuer’s website. Ask that the account be closed and where you should send the documentation.

“Ask your credit card issuer if there are any recurring card charges, and ask them to cancel those recurring charges,” says Lesavich. If interest or financial charges have been applied to the account, request that these charges be waived due to death.

The phone call should flag the account. However, in order to formally close an account, it is wise to write a written confirmation. Include the deceased’s name, date of birth, date of death, social security number, address and credit card account number, and all of your contact and relationship information with the deceased.

Since credit card issuers handle the death of a cardholder differently, it is important to agree on the necessary steps with each issuer individually. Some issuers, such as Discover, self-verify the death and delete the account upon notification.

Bank of America, on the other hand, will refer you to their real estate department and assign you a case number and a specialist to verify the copy of the death certificate you provided. The bank may request additional documents, such as a change of address or internal bank forms, depending on state law. Once these documents are approved, the account(s) can be opened and the funds transferred to your account or paid out in accordance with your instructions. You may even need to open a real estate account.

Settle by inheritance

Family members are not responsible for a loved one’s credit card debt, except in a joint account.

If the deceased was the sole owner of the account and had a balance on their credit card, this will need to be resolved as part of the probate process. The creditor must petition the property for any balance. If there are not enough assets in real estate to cover the debt, creditors may not get paid because credit card debt is unsecured debt.

“Before you pay anything, ask the credit card company to provide proof of ownership,” says John Caleb Tabler, associate attorney for Lau & Associates in Pennsylvania.

“Make sure [any card debt] receives payment from the property of the estate, if any, ”says Tabler. “Be aware that if you embezzle property as a personal representative, abuse it, or, in the case of Pennsylvania, pay out money from the property before official accounting is held, as a personal representative you may be held liable for debts. ”

As a personal representative, avoid paying your own bills for the deceased and never mix your money with the money of an inheritance. You are not required to personally pay any debts of the deceased unless you are already the liable party to the account.

“Any protection that an individual personal representative may have ends if they enter into an agreement to pay the debt of the deceased,” Tabler says.

bottom line

Taking care of credit card accounts is only one part of the many duties of a personal representative or steward of someone’s property, but it is very important. By protecting the property and name of a deceased person from embezzlement and fraud, you help ensure that all assets are used for their intended purpose and future injury is minimized.