Document Name Discrepancies

Chris describes a situation where he helps someone who files for Social Security and Medicare after spending most of his life going by a nickname that was not his legal name.

"While this wasn't an incoming question from a reader, I recently helped someone with a unique situation and felt we should talk about this because many people use names that aren't their legal names. We have two cases in our office: Jake and Greg. Their first names are not Jake or Greg, but that's what they go by. Here is the situation that was presented."

When this person went in to file for Social Security and Medicare, the representative noticed that his passport didn't have the first name that was on his Social Security records. He had used a simplified version of his first name when he got his Social Security number. When Social Security noticed his passport had a 2-word first name, they corrected it in the system.

That brought another question to this person's mind: "Gee, do I need to go to where my accounts are being held – the custodians like Fidelity, Vanguard and Schwab, my bank, my credit union, those kinds of places? They all have that simplified first name because identification verification wasn't as stringent as today when I opened those accounts long ago." He wondered if he should fix them.

I recommended that he get those discrepancies fixed and aligned with what is on his passport or whatever he uses as his official ID. Here's the reason why.

A year or two ago, my mother had to go through a similar situation because she had, for her whole life, used a nickname on plenty of legal documents, such as bank and credit card accounts. Decades ago, when you started setting those accounts up, the institution would pretty much accept whatever name you wanted to use. But more and more often, she began to find that she had to prove that she was the person on the document or account.

The strict identification requirements at the airport for travel made her finally realize: "My life is just going to get harder and harder as I have to keep explaining why the name is slightly different on these things." In her case, the solution was to make a legal name change to what was technically her nickname.

To avoid what is likely coming in the future, I recommended the same to the person who contacted me. As computers become more powerful and pervasive and security measures intensify, legal transactions will require ever-greater identification verification. While it might eventually be resolved, any discrepancy in some records, even if it seems slight, will delay and clog things up. Life will be a lot easier if everything with your name matches your legal identification.

I envision someone trying to do an out-of-the-ordinary transaction – maybe a large distribution or large money transfer – or trying to travel. A red flag gets raised that there's a name discrepancy, and suddenly, what you were trying to do gets derailed. If you have a similar circumstance, I recommend you be proactive and clean up things before identification requirements become even more strict.

I wanted to share with our readers what I shared with the person who contacted me. I'm sure there are plenty of horror stories out there of people having inconvenient – and even costly – issues because of name discrepancies on documents and accounts. Try to correct that now before it becomes a problem.