Death of a Spouse
Fortunately, I have not had to go through this dreadful experience. In this situation, many of the steps I believe will help you transition into the next phase of your life are similar to getting divorced. As a result, many of my widowed clients have taken great comfort in getting financial plans done so they have a better idea of the true state of their finances and so that they feel that they are once more taking charge of their lives. I, however, once more caution against making impulsive decisions in their desire to start getting on with your life but also to give yourself permission to spend a little bit on yourself to help you get through this difficult time. I suggest reading the information on getting divorced, as many of the steps you might want to take here are similar. As well, here are a few additions steps to consider if you are recently bereaved:
- Hire a lawyer to help with adminstering the deceased’s estate and don’t hesitate to hire others professionals such as accountants, auctioneers, realtors, business valuators and investment advisors. You don’t have to do everything yourself. If a business is part of the estate, I would strongly recommend hiring help to make sure things go smoothly, you don’t undervalue the business or miss any tax planning opportunities.
- Contact the deceased’s insurance and investment advisors and his employer to check for insurance policies and investments that had beneficiary designations.
- Consider transferring joint accounts in both your names to a new account in solely in your name, as sometimes banks lock up joint accounts after the death of one person on the account. You might also try changing ownership of vehicles solely in the deceased’s name to yours, although this is not always successful.
- Do not distribute estate assets until the Will has been probated and the time period for any Will challenges, including those under the Wills Variation Act have passed. Any spouse or child of the deceased, regardless of age or financial circumstances has the right to apply to vary the terms of the deceased’s Will in British Columbia. If the deceased had children from a previous relationship, this appears to significantly increase the chance of potential problems, as these children may be advised that they end up with nothing if they do not act now. Any executor who distributes estate assets before the time period for any creditors or disgruntled beneficiaries to make a claim against the estate (or before getting the okay from the Canada Revenue Agency) may be personally liable.
- Review your Will and estate plan. Many couples seem to own many investments or assets jointly, which saves on probate fees and simplifies matters for the surviving spouse. It is usually necessary to take additional steps after the first spouse passes to minimize taxes and expenses for the surviving spouse when he or she passes. I suggest discussing options and some of the related pros and cons once you feel up to it.
- Educate yourself on financial matters. In many cases, it seems that one spouse is in charge of the family finances. I have heard how overwhelmed some widowed clients feel when having to deal with these matters for the first time. While it makes sense to hire professional assistance when necessary, don’t be afraid to ask questions, take courses or get a savvy friend or relative to show you the ropes. Nobody cares more about your money than you do! Being able to slowly handle more of your own financial affairs (no, it doesn’t have to be an overnight transition!) or even asking ‘better’ questions can mean feeling more in control of your affairs and greater peace of mind.
- Do a comprehensive update of your financial plan, especially if death was unexpected. Your spouse’s death may (or may not) dramatically affect your financial picture and plans. In most cases, things aren’t nearly as bad as the survivor may think. If changes are needed, you may still feel better knowing where you stand and starting to take the necessary steps. In both cases, the knowing is usually better than the worrying.
- Consider whether you want to add someone else to any safety deposit box you own, as otherwise it will be tied up on your death until your Will is probated if there is no one else entitled to access it. There is the risk that the other owner could empty the box during your life without permission, so this is not a choice to be made lightly. If nothing else, do not leave your Will in your safety deposit box if no one else can access it.
- Leave a list that can be easily found after your passing for your executor detailing the account numbers and the institutions holding all of your investments and bank accounts, as well as a list of your insurance policies. As well, list all of your other assets and the names and numbers of all your professional advisors, including lawyers, accountants, insurance and investment advisors, as well as anyone else your executor may need to contact to administer your estate.