Today we’re going to focus mostly on the financial aspects and some of the administrative aspects that you should take care of after your spouse passes away. The emotional aspects involved in losing a spouse are something totally different that I think you should take care of, but let’s focus on the financial part for today.
The first decision you’re going to want to have to make involves organizing the funeral. In order to plan the funeral effectively you will hopefully have sufficient cash flow in order to pay for everything required.
If not, you need to make a withdrawal –where’s that coming from? RRSP? TFSA? Who knows. Hopefully you can rely on someone like your investment advisor to help you with that decision if there is an immediate cash need.
Pension/Insurance
Once the funeral has passed, you will have a bit more time. You can start thinking about other things such as the Canada Pension Plan (CPP) benefits, CPP survivor benefits, and pension benefits. If your spouse worked, they may have had some pension benefits, some survivor benefits and maybe some life insurance at work.
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With life insurance, you will want to dig deep into the policy, to see what your spouse had in terms of coverage. Collecting life insurance isn’t a one-day process. You will need to take the time to properly fill in and submit the forms before you are able to collect. Be sure to check with yours and your spouse’s employer to figure out what other policies they may have. You will also need to apply for income assistance if required.
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If there is a cash flow need, there might be a desire for income assistance. That’s a process, and you will get a subsidy for your income.
Administrative
You will also want to take care of a whole bunch of administrative (admin) things. This includes things such as your bank accounts, changing your bank accounts, credit cards, and cell phones. But even on the admin side, there could be things such as RRSPs and RRIFs. You will want to make sure that you take a look at the RRSPs and RRIFs.
You will want to contact your financial institution in order to take out anything they have. Hopefully you’ve been quoted as the beneficiary on that. It’s a fairly easy, smooth transfer from RRSP to RRIF. However, you will need a death certificate, or a copy of the will for transferring those into your name. You will also want to claim the life insurance. At this point you should also probably create a budget.
What we often see is that one spouse is in charge of the finances and the other spouse is sometimes left behind. If it so happens that you’re the spouse that’s in charge of finances, you probably have an idea of what your budget is. You probably have an idea for what your monthly expenses are. You’re probably okay.
If you happen to be the spouse that’s kind of in the dark with respect to finances, this is extremely important. You will want to talk to your planner or your investment advisor. You’re going to want to create a budget, because now there’s a whole bunch of income that is no longer coming in.
Back on the admin side, you’re going to want to apply for credit cards in your own name, you’re going to want to ensure that everything that is jointly held is going to have to be converted to your own name.
You’re also going to want to make sure that you decide if you have any ongoing large expenses such as house renovations. How are you dealing with those? Are you continuing them or are you kind of cutting those off?
If you have multiple vehicles, where are you going to be wanting to sell the vehicle? Will you stay in the home you currently are? Does it make sense that you have mortgage insurance? Did you have anything to cover the debt that you owed?
How are you going to deal with that if it’s a painful thing for you to be in that home, or if you don’t need the space that you had? Maybe you’re retired, and you had a very large house or very large condo and you don’t need all that space anymore.
Consider moving if it’s a need for cash flow. Now, all of this is going to matter with respect to creating a plan. It’s critical when you go from two incomes to one or when you go from a one pension to none, or you have all these extra expenses that didn’t exist before.
This would be a very important time for you to review your financial plan, or get one set up if you don’t currently have one. Additionally, after all of this, you’re going to have to deal with the will – probating the will, getting the estate set up, and paying the estate tax bill.
There are some trust companies that could help with that. Talk to your investment advisor. These are all things that are going to have to happen in the next year or so after your spouse passes.
It’s a stressful and overwhelming time in your life, but if you start itemizing the stuff you need to do, building a checklist and attack it one by one, it’s a way that you could get rid of them in an organized fashion. It’s important to reach out and get the advice you need from the right team of experts. At the Tetrault Wealth Advisory Group, we can help you navigate this difficult time and educate you on everything that needs to be completed.
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