Automatic Bill Pay: Blessing or Curse?
This post is part of our ongoing series exploring the impact of technology on legal issues. For an introduction to the series and a collection of the posts in the series, check out this post.
“Thank you. We have received your automatic payment.” “Sign up for automatic bill pay to reduce your student loan interest rate.” “Ensure your payments are never late! Sign up to automatically pay your bill.” “Reminder, monthly payment scheduled.”
Those email subject lines are taken directly from my personal email account. I receive regular inquiries trying to persuade me to switch to automatic payments for all of my monthly bills. Clearly from some of the subject lines you can see that I do have some bills (the small ones) set for automatic bill pay and flatly refuse to set up others. Why? Well in my law school days it was more to prevent an inadvertent overdraft than anything else. However, now, it is more to prevent a mess in the event of my death. Horribly morbid. I know. But I have a very good reason.
Very early on in my time with Russell, Krafft & Gruber, I was sitting in a weekly meeting, when a partner came in and told the collective room about this odd article she had read that morning. It seems automatic bill pay helped hide a single woman’s death for nearly six years. Impossible you say? Nope! This Michigan woman’s life was the perfect storm of anonymity and efficiency that allowed her death to go unnoticed for several years. She had set all bills to be paid automatically, including payments to her neighbor to maintain her yard. She traveled often for work and would be gone for weeks at a time. She was not very social with neighbors and didn’t have any family in the area. Once the money in her accounts ran out, collection notices started to pile up. It was only after her home had been foreclosed on that her remains were found. This story horrified me on several levels, but once I got over the initial shock, the estate administration lawyer in me started to marvel at the mess that would be involved in trying to track down all the payments that should have stopped at death and cleaning up her estate. (For my clients who thought I was just trying to scare them with this story or those who need to read it with their own eyes to believe: here’s a link to the article.)
Obviously this is an extreme example. It is a one in a million situation that is not likely to reoccur. I completely understand that. However, automatic bill pay still rears its ugly head in many estates. I can’t begin to tell you the number of man hours my office has spent tracking down payments that were wrongly made after death because an executor didn’t realize their loved one had automatic bill pay set up. With more and more people switching to paperless billing, it can be impossible to even track until the money comes out of the account. Obviously the convenience of automatic bill pay often outweighs this concern and I don’t actually advise my clients against automatic bill pay. I just suggest that they keep a list of the bills that are being automatically debited from their account somewhere it can be found by the person they have appointed as executor. Usually this does not include a list on your laptop or in the cloud as your executor is likely to have a hard time accessing that without some hard work. More about that in a later article. If you come to my office for your estate planning needs, you will leave here with a booklet that helps you keep all of this information in one place. It is just up to you to keep it up to date. And I am sure, as I slowly give in to the luxury of not having to log in each month to pay my bills, I too, will have most bills automatically debited from my account.