Baby boomers know they need to protect their identity. So they shred documents, hide passwords and guard Social Security numbers.

But what many don’t know, and what many of their advisors don’t know, is that they probably need to extend their identity theft protection efforts to their estate plan and also to their health care arrangements.

Identity thieves are getting information about people in places where there is trust and especially where people are vulnerable, explains Adam Levin, chairman of Identity Theft 911, Scottsdale, Ariz. and former consumer affairs director for the state of New Jersey.

For instance, thieves are targeting people who have just died and whose homes and mailboxes are filled with personal information that make identity theft possible, he says. Some also obtain personal data from health care environments.

The estate issues are not something many people know about, says Levin.

In the case of sudden death, for instance, the bereaved usually has not had time to prepare or think of contingencies, he says. Furthermore, the family will be feeling grief, arranging the funeral, preparing for out-of-town guests, and otherwise preoccupied. They will not be thinking of notifying the credit card companies or bureaus, and they will not be expecting that the deceased’s identity could be stolen and used for fraudulent purposes.

That lack of attention opens up possible access to information and data about the person, with the result that some thieves “just crawl into the life of the deceased,” says Levin.

Example: As this was being written, reports in the New York Times and other media said two men in their 60s had just been arrested for attempting to cash a Social Security check of another 60-year-old man who had just died of natural causes.

Donald S. Hardy, founder and owner of Quantum Benefits.com in Atlanta, said he is aware that some people will use the Social Security number of a deceased person when applying for a job or insurance. For that reason, he says, data on applications are routinely verified–the Social Security number, phone, address, birthday, etc. In addition, as part of financial planning, he educates customers on identity theft and shows them how to obtain credit reports and/or sign up for identity theft monitoring services.

But, up to now, he has not been carrying this over to his estate planning services–”I haven’t but I should,” he says.

The estate issues can extend beyond the funeral. It takes time for creditors to catch up to the fact that the person has died, Levin points out. It also takes time for the family or executor to gather all the bills, sort through the important ones, and make the related decisions. While this is going on, if they leave unshredded bills in the home, thieves may be able to break in and get that information, he says.

If the time lag is long enough, he warns, the thieves can use this information to apply for credit in the name of the deceased, without the creditors or family ever knowing. “They can get credit without a photo ID or Social Security card,” he explains.

Some also try to apply for a 2nd mortgage, buy a motor vehicle, or purchase exotic vacation tickets, he says. Or they try to pilfer the deceased’s bank accounts.

Another opening for thieves occurs when filing for probate, Levin says. “Here, the Social Security number becomes equivalent to a public record, and the thieves can also get access to information on the surviving spouse, because some states make that information available.”

The other growing identity theft concern involves theft of personal information from health care settings, Levin continues.

“People in hospitals and other care settings have access to the information and they sometimes move on it as soon as the person dies. This includes administrative people as well as care providers. “Some crooks pay for the records … and then use the information to file false medical claims, or to enable someone to get care in the name of the victim.”

It’s a problem for the elderly, especially if they are not looked after by caring people or people with the best intensions, he adds.

Sometimes, medical and other personal information is used while the person is still alive. Steve Lawson, president and founder of Senior Advisors Network, a Carmel, Ind. firm that works with advisors, recalls hearing of a woman whose health information was stolen and used as a basis for obtaining care for another woman. The victim did not know about the theft until she made an application, and the MIB report showed all kinds of ailments the woman did not have.

In effect, the insurance companies are “being looted” by the identity thieves, claims Levin. And victims are seeing their own health records commingled with those of the person who used the stolen identity, he says, noting that this can impact treatment, prescriptions and more.

The solution? When advisors handle insurance, they should also educate on matters related to the estate, says Hardy. That, and making arrangements and plans in advance, is the best way advisors can help clients prevent problems, he says.

Levin believes financial professionals should start viewing management of one’s “identity portfolio” as being as essential as management of the investment portfolio, bank account and credit.

Insurance companies can help by offering identity protection programs that spring into action as soon as being notified of a customer’s death, Levin continues. Among other things, such programs suppress access to the deceased’s credit files.

As for advisors, they should incorporate identity theft education into the estate plans they draw up for boomer clients–or any clients, he continues. “The goal should be to create a security blanket for the family at the time of the insured’s death.”

Most advisors don’t do this today, he says. One reason is that “identity theft is foreign territory to many people, and the way it morphs and mutates makes it hard to keep up.” Also, he says many advisors are “woefully undereducated” about what to do–about credit, protecting credit files, building credit histories, responding at time of a client’s death, etc.

A lot of boomers are not savvy about anything related to estates, adds Hardy, citing guardianship issues and serving as executor as examples. Identity theft in the estate is one more thing they don’t know about.

Still, Levin says it’s a moral responsibility for advisors to provide such guidance, in their fiduciary capacity. “In light of the world we live in, (it’s necessary) if the advisor wants to protect the family in retirement and through the estate. The advisor needs to take into account the new form of danger and the vulnerabilities, and discuss how to keep the information safe.

Hardy agrees. It is a matter of ethics, he says. Also there is potential for liability to be found in an advisor’s files–”for things not addressed today that will be considered wrong 20 years from now.”

Agent associations can help too, says Levin, by providing their members with the education they need in this area.

Until being interviewed by NU about identity theft in the estate, Michael Clark says he had never thought about “how devious criminal minds could prey on the deceased and the family” by stealing the identity of the deceased. A senior financial advisor with Ameriprise Financial, Nashua, N.H., he says he is aware of identity theft. In fact, his firm periodically hosts a seminar for clients on this topic.

“But it shocks me, to think that they can exploit the system that way.”

Clark says he is now putting the topic on the checklist he gives to survivors, when a client dies. The checklist covers things the family will need to know about and do. “I think this should be among the top 3 items on that list, not the last 3.”