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Financial planning tips

October 16, 2014

Ten things you need to do when your spouse dies

When you’re newly widowed, you need to think clearly and make good decisions in the midst of your grief. This checklist can help you get through it.

Whether it’s a sudden loss or the result of a long illness, the death of your spouse is emotionally devastating and you will need time to grieve. However, many important decisions with financial implications must be made sooner, rather than later. For example, the funeral must be arranged, bills must be paid and the estate must be settled. It’s usual for you to be your spouse’s executor, unless you are too frail or otherwise physically incapable of these tasks.

This is a time when close family members or friends and trusted advisors can often do a lot of the leg-work. But ultimately you as the widow or widower must direct these people and make crucial final decisions.

Here are 10 practical things you need to do when your spouse dies:

1. Make funeral arrangements

Did your spouse purchase a cemetery plot or make other pre-arrangements? If not, you will need to select a funeral home. In either case, you will need to meet with the funeral director. Be sure to obtain multiple copies of the death certificate from the funeral home. (You can read about different funeral options and their approximate costs at Canadian Funerals Online.)

2. Assemble your team

You may need a lawyer, an accountant and a financial advisor to settle your spouse’s affairs. If you already have a satisfactory working relationship with one or more of these professionals, they are the logical choice. Otherwise, ask family and friends for personal recommendations. Professional associations such as the Certified General Accountants, the Law Society of Upper Canada and the Financial Advisors Association of Canada (Advocis) can also assist you.

3. Apply for government benefits

The Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) pays a lump-sum death benefit and you may be eligible for survivor benefits and children’s benefits as well. You may also qualify for the Widowed Spouse’s Allowance, a benefit available to the spouses or common-law partners of Guaranteed Income Supplement (GIS) recipients from ages 60-64. If your spouse was a veteran, other benefits or allowances may be payable. Be sure to officially notify CPP/QPP and Old Age Security of your spouse’s death, so neither makes any overpayments that will need to be repaid later.

4. Contact current and past employers

If your spouse was employed at the time of death, you may be eligible for group life or accident insurance benefits, depending on the cause of death. In addition, there may be retiree life insurance in force. You may also be entitled to a lump sum or monthly payment from the company pension plan or other savings plans. Contact previous employers if you think there could be accrued pensions that were never paid out.

5. File life insurance claims

Gather information about any life insurance policies and, if you are the beneficiary, contact the life insurance companies to make a claim. They will request a copy of the death certificate and other documentation to validate your claim. Proceeds are usually disbursed within 30 days after all requested materials have been received.

6. Contact banks, credit unions, etc.

You will continue to have access to joint bank accounts. Any account in your spouse’s name alone typically will not be accessible to the executor (who may be you, as noted above) until the will is probated. However, if there was money in your spouse’s account, the bank will likely advance funds to pay for the funeral if you present a bill.

7. Close other accounts

To help prevent fraud, provincial health insurance coverage must be cancelled. Turn in your spouse’s driver’s licence to the closest Ministry of Transportation Office along with a copy of the death certificate. Close credit card and other charge accounts, and take your spouse’s name off joint cards and accounts. Contact appropriate government offices regarding your spouse’s social insurance card and passport.

8. Revise wills and powers of attorney

Review your will and power of attorney. If changes are necessary, have your lawyer prepare new documents for your signature.

9. Review your real estate

If you and your spouse owned your home jointly, you will retain full ownership and the value of the property will not form part of the estate for probate purposes. However, ask your lawyer whether you need to transfer it into your name as sole owner. If you want or need to downsize, don’t rush. Try to delay this decision until you are emotionally and physically ready.

10. Preserve your assets

If your spouse dies, you may become a target for fraud artists less interested in your wellbeing than your money. Ask for time to think over any financial proposals and discuss them with your advisors. And when you are ready for romance again, consider having your lawyer draw up a pre-nuptial agreement that will protect you and your heirs, before you take the plunge and remarry.

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