Not Everything Belongs in Your Estate Plans
Perhaps the most basic function of an estate plan is to pass along your assets to the people you care about upon your passing. You want your estate to pass to your beneficiaries as easily and efficiently as the law allows. For that to happen, you need an estate plan that’s complete, carefully crafted, up to date, and in line with your goals. A complete estate plan cannot and should not contain every piece of information imaginable. There are items that don’t belong in the documents that make up your estate plan.
Identity Theft Hazard – Social Security Numbers
Mistaken identity is not a major problem in estate planning. While you may be tempted to use Social Security numbers to identify your beneficiaries with specificity, it’s not necessary, and it’s potentially dangerous. You need to provide enough information to accurately identify your beneficiaries, but that rarely requires more than a full first, middle, and last name. Using a Social Security number will guarantee that the right person is identified, but at a significant cost.
Some estate planning documentation may need to be entered into public record. A last will and testament, for example, may be entered into the record of the probate court when you pass away. Real estate transfers may require a certificate of trust or power of attorney on the record, and the law requires that these records be publicly available.
Anyone will be able to see these documents if they file a proper request and pay a fee. That’s a small price to pay for people looking to gather personal information in order to commit identity theft. The Federal Trade Commission reported more than 1 million instances of identity theft in 2022.9 Since they’re unnecessary and come with a strong risk of exposing you and your beneficiaries to harm, Social Security numbers do not belong in your estate planning documents.
It’s important to distinguish between retirement accounts, insurance policies, and other accounts that require a Social Security number to identify your beneficiaries and your estate plan. These accounts are private to you and will not be entered into the public record. The use of Social Security numbers in those forms does not expose you to identity theft.
Theft Hazard – Bank Account Numbers
As with Social Security numbers, bank and other financial account numbers are best kept out of the public record. Accounts exposed in this manner could be emptied quickly by unsavory actors. You need to store your account numbers safely, and that means not adding them to your will.
In general you should err on the side of caution when it comes to sharing account numbers. Even family and close friends should not have access to these numbers unless they’re named trustees, guardians, or have been granted power of attorney. In that case, they’re under a legal obligation to act in your best interests when making financial decisions on your behalf.
Selecting someone to act on your behalf isn’t always easy. In many cases, people choose a close family member to serve in this capacity, but even family can succumb to the temptation of access to your financial information. A recent case out of New Hampshire found a husband and wife guilty of using their access to the account of the man’s elderly father to make unauthorized transactions.
Account numbers are among the most sensitive pieces of information you can possess. They don’t belong in your estate plan and should be shared only with carefully selected individuals empowered to make financial decisions on your behalf under certain circumstances.
Parting Shots – A Legal Hazard
It’s difficult to make your way through life without grievances. Family strife and rivalries can make their way into a last will and testament in a way that can cause problems. History contains many examples of people using the tools of estate planning to deliver parting shots.
Your will may seem like a last, best opportunity to deliver a strong rebuke to the people who have done you wrong, but you might want to choose a different approach. Some courts have ruled that some statements delivered in estate documents or through the executor of the estate constituted testamentary libel. Testamentary libel refers to statements published in a will that are false and that do damage to a person’s reputation. In one noteworthy case, a man declared that his brother’s children were born out of wedlock. At that point in history, this was seen as a serious problem. One of the children sued the executor of the estate for the damage to her reputation. The court found that she had the right to pursue this cause of action meaning it’s possible to be held liable for damages based on statements you make in your will.
In general, you should focus on the good you want to accomplish with your estate plan. Risking a potential lawsuit to deliver a message of anger or disapproval is not likely to create the effect you’re after..
Speak to an Experienced Estate Planning Attorney
Knowing what not to say might be as important as knowing what to say in your estate plan. By working with a skilled estate lawyer, you can make sure your documents align with your goals to maximize the value of what you’ve built over a lifetime. Call the Law Office of Janet L. Brewer in Los Altos today at 650-325-8276 to schedule a consultation to discuss your estate.
Notes
- New FTC Data Show Consumers Reported Losing Nearly $8.8 Billion to Scams in 2022, Fed. Trade Comm’n (Feb. 23, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/02/new-ftc-data-show-consumers-reported-losing-nearly-88-billion-scams-2022.
- N.H. Dep’t of Justice, Kile and Debora Madsen Sentenced to State Prison for Stealing from Elderly Relative, Off. Att’y Gen. (Oct. 3, 2022), https://www.doj.nh.gov/news/2022/20221003-madsen-sentenced.htm#:~:text=Madsen%20to%20each%20serve%20one,years%20after%20release%20from%20incarceration.
- 162 S.W. 584 (Tenn. 1918).
