FDIC's Consumer News: Expecting the Unexpected


The FDIC recently published its Summer 2014 Consumer News, which provides advice on variety of banking topics. This issue’s main focus is preparing for the situations that occur with the inevitable death or disability of family members. While most of the tips are probably well known to those who are financially savvy and current with the latest financial news and trends, there are some useful reminders of essential information. I've included a few excerpts that I found most useful.

Planning for Death, Disability and Other Personal Financial Crisis Points: Expecting the Unexpected

"Expecting the Unexpected" when talking about disability or death is somewhat of an oxymoron, because it’s not unexpected: it’s going to happen to all of us. A little planning on your part can make managing your financial affairs much easier on your family:

From the article "Expecting the Unexpected: Preparing Financially for a Disability or Death":

Keep a list of your financial accounts and personal documents in one secure place. Ensuring that a loved one responsible for your affairs can easily find a list of your deposit accounts, investments, loans and other assets or obligations will save them time and avoid risks of unnecessary expenses (such as fees associated with certain old, "dormant" accounts).
Consult with an attorney about legal documents to create or update. One example may be an advance directive that will specify your wishes for medical care if you are terminally ill. Others may include a will and/or a trust to guide the distribution of your property after your death, and a "power of attorney" authorizing someone else to handle transactions and make decisions on your behalf if you become mentally or physically incapacitated.
Take steps to make it easier for your heirs to access your valuables. Start by confirming that the beneficiaries or co-owners you want on accounts are named in the records. For example, having joint accounts with your spouse or another loved one can make it easier for him or her to access the account if you become disabled or die, but you are giving this person equal rights to the money in that account. You can also set up payable-on-death (POD) accounts at a bank that would ensure that the people you name would have access to the money after you (or any other co-owners) die. And if you have a safe deposit box, talk to a bank employee or an attorney about how a loved one or another person you designate could access the box. Procedures vary considerably by state. For example, after a death, some state laws may permit a decedent's safe deposit box to be accessed immediately by a co-owner, but other states may generally not permit anyone to remove any items other than a will and burial instructions for several weeks.

From the article "What to Keep Where: From Bank Services to Document Storage Online":

A safe deposit box may be the best place for important things that will be costly, difficult or impossible to replace and that you won't need to access immediately. Examples include property deeds, car titles and U.S. Savings Bonds that haven't been converted into electronic securities. In case there's a flood or other water damage, seal important documents in waterproof plastic bags or containers.
A waterproof emergency evacuation bag is the best place for essential items if you need to quickly leave your home because of a flood, fire or other crisis. Contents would likely include copies of identification cards, your birth certificate, and the front and back of your key credit and debit cards.
The Internet gives you options to keep copies of certain valuable items that you want to access from anywhere. Examples include some of the same documents in your emergency bag (in case you are away from home when a disaster strikes) as well as pictures or videos of your home's contents for insurance purposes. An online "cloud" storage service from a reputable provider is one possibility. Another strategy is to e-mail yourself copies.

From the article "Picking Up the Pieces: Managing a Loved One’s Finances After a Serious Life Event":

Helping an Elderly or Ill Person

Get a handle on the most important financial records. Look into getting a "power of attorney," which is the legal authorization for you to manage matters like finances and health care decisions if your loved one becomes mentally or physically incapacitated.
Avoid financial crimes. Help loved ones monitor their bank, investment and credit card statements plus their credit reports to look for suspicious transactions.

Managing the Affairs of a Deceased Person

Take precautions against identity thieves who target the deceased.Criminals look in obituaries and other sources for details about deceased individuals they can use to try to open or access accounts. Among the first steps to take soon after a loved one dies is to notify his or her banks and investment firms so they can scrutinize attempts to withdraw funds from the account. Also consider reporting the death to the fraud departments of the nation's three major credit bureaus (Equifax at 1-800-525-6285, Experian at 1-888-397-3742 and TransUnion at 1-800-680-7289).
Locate important documents needed to wind down the deceased person's financial affairs. Examples include insurance policies, the most recent will (an original, not a copy) and multiple copies of the death certificate (needed to apply for death benefits from life insurance policies or Social Security and to access bank and brokerage accounts).

All of us face personal hardships at some point in our lives. Whether it’s a death, a life-changing disability, or a financial crisis, we become more vulnerable to the schemes of crooks and scammers. Dealing with serious events requires your undivided focus, which may result in you being distracted and more easily deceived. Some good, common sense reminders are listed in "When People Face Tough Times, Crooks Try to Profit":

Protect personal and financial information. Don't provide bank or credit card numbers or other personal information over the phone, through e-mail, as a text message, or over the Internet unless you initiate the communication and you know the other party is reputable. Review financial statements so you can quickly report any irregularities. And always keep your checkbook, blank checks, used checks, account statements, credit cards and other financial items in a secure location.
Look out for the people you care for. Since many scams target the ill or the elderly, pay attention to suspicious behavior, such as a sudden and unexpected major purchase, the opening or closing of a bank or card account without a good reason, or hiding financial statements to conceal what may appear to be an embarrassing mistake.
If you're a disaster victim, be careful about accepting unsolicited offers to make repairs. Ask people you trust for recommendations of licensed and insured contractors.

On a somewhat lighter note, this issue has also provided more information on the introduction of computer chips into credit cards.

From the article "What’s This Computer Chip Doing in My Credit Card?":

A microchip makes it less likely your payment card will be used for a fraudulent transaction in person, such as at a store. "Compared to the magnetic stripe cards that we are accustomed to, it is much more difficult for criminals to create fraudulent cards that contain microchips," said Jeff Kopchik, a Senior Policy Analyst at the FDIC.
You still need to be on guard against fraudulent purchases made with your card online, over the telephone or by mail. Unlike with in-store transactions, there is no card-reading device receiving the secret, one-time authentication code from the microchip that verifies the card's authenticity. Kopchik said this largely explains why there was a significant increase in online card fraud in Europe immediately after chip cards were introduced.
If you are planning to visit Europe, you may want to request a chip card from your financial institution. That's because many European merchants no longer accept magnetic stripe cards.

  |     |   Comment #1
Thanks for posting. I lot of good information here. Not sure I would have anyone on my account except a spouse. A POA is my choice, in case of a divorce, accident or someone is sued the funds are at risk in our state.  A POA protects you and in the state that I live it now has a 10 year prison term for embezzlement or abuse of funds etc. A person can put in any special instructions like copies be sent to siblings of what income and expenses were each month, or copies of the bank statements etc. The person chosen signs a document declaring that they understand the document and will fulfill its requests under penalty of a prison sentence. 
The POA only is in effect until death. 
I also was personal representative of 3 estates. The first one had 27 people to which the estate was divided. I sent copies of the will, and documentation of the appraisal of house and contents and accounts. Made a ledger sheet of income and expenses each month, copied  and mailed them monthly to each person. No trouble except for my mother-in-law who was upset when after 2 months driving the 30 miles to mow the lawn each week until the  house was sold I paid $20 to have it done. I finally told her that she lived 6 blocks away and maybe she would like to mow her sisters lawn. She also wanted me to rent the house instead of selling it and dividing the money among the relatives. To that I just said no. 
To keep all probated property away from the eyes of the public you can just have a trust. Too many people do not have these documents taken care of when they are able to do it. Death is a fact of life and if you want it done your way do it. If not the state will decide how it is done. 
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