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The Financial Steps You Need To Take When Your Spouse Dies

Updated: Sep 30, 2022

The death of a spouse is a traumatic life event. The more prepared you are the less likely you are to be caught off guard as much by financial matters that are requiring immediate attention.

Source: Canva

According to the famous Holmes and Rahe Stress Scale above, the most stressful event in a person’s life is the death of a spouse. This is even more stressful if you have younger children.

I often advise clients not to make any major financial decisions for at least a year after a divorce or death of a spouse. The stress and grief can be overwhelming, and you may end up making rash choices as a result. Regardless of how long your relationship was; it is still a tremendous loss.

Here is what you need to do when your spouse dies:

Source: Canva

· Make funeral arrangements if your spouse had not already done so while alive.

· Obtain multiple copies of the death certificate from the funeral home. If the person died abroad, the certificate must be obtained in the country where the death took place.

Gather all important documents

· Will/trust

· Life insurance policy

· Birth certificate

· Marriage certificate

· Death certificate (if you already have it)

· Social security cards for both of you

· Tax returns

· Bank statements

· Investment accounts statements

· Pension/retirement plan statements

· Loan statements & Mortgages

· Motor vehicle titles

· Car insurance

· Homeowner’s insurance

· Health insurance

· Bills

· Safe deposit box information (and key)

· Business ownership or interest (s)

If your spouse was still employed

If your spouse was still employed at the time of his death you will need to contact current and past employers. 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.

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.

Make a List

Make a complete list of your spouse’s credit and debit cards, business expense accounts, and any other open account they may have. Each of these institutions needs to be notified of your spouse’s death, and many will require a copy of the death certificate to validate your request to close the account.

Ask each company whether there is any applicable insurance that pays off the account in the event of a death.

Check auto loans, credit cards, and mortgages for this type of insurance.

Contact banks, credit unions, etc. You will continue to have access to joint bank accounts, although many institutions would recommend you open a new bank account in just your name and close the joint account, to prevent any kind of fraud.

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

You will need to cancel the following:

· If your spouse was receiving government pensions, employment insurance and tax related payments, you will need to call these issuers to let them know of his death so they are not making any overpayments that will need to be repaid later.

· The deceased’s personal identification cards, registrations, Social Insurance Number will all need to be canceled.

· If you live in the US, notify your local Social Security Office, and have your spouse’s social security number on hand.

· Cancel any recurring membership fees or annual magazine subscriptions that apply only to your spouse and adjust any that applied to both of you.

· Have a lawyer probate your late spouse’s will. Depending on the will, beneficiary designations and size of accounts these institutions may or may not require a probated will before releasing any of his assets to you.

· Go to yours or your late spouse’s financial advisor to address any investments he may have had RRSP (Canada) or 401K accounts (the US).

· Review and update your own will and power of attorney.

· 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.

· Ask your lawyer whether you need to transfer it into your name as sole owner. If you’re considering downsizing, try to delay this decision until you are emotionally ready.

Get help from family and friends. This is a very difficult time in your life.

Apply for government benefits In Canada:

Allowance for the Survivor — a monthly nontaxable benefit to low-income widowed spouses who are not yet eligible for the Old Age Security pension.

Death benefit — A one-time payment to the estate of a deceased Canada Pension Plan contributor.

Survivor’s pension — A monthly pension paid to the survivors of a deceased Canada Pension Plan contributor.

International benefits — Survivor benefits to eligible individuals who have lived or worked in another country.

Children’s benefit — A monthly benefit for dependent children (under age 18 or between 18 and 25 and attending school) of a deceased Canada Pension Plan contributor.

Veterans Affairs Canada — Death Benefit offers a lump sum when a Canadian Forces member dies in the line of duty.

Survivor Benefits in the US

In the US, there is a one-time death benefit to surviving spouses of $255, which you should inquire about when you call Social Security to inform them of your spouse’s death.

There are survivor benefits as well. The earliest a widow or widower can start receiving Social Security survivor’s benefits based on age is 60. As a general rule, survivors’ benefits based on age will be about the same total Social Security benefits over a lifetime whether they start early or at full survivor’s retirement age.

If monthly benefits start before full retirement age, the amount is smaller to consider the longer period a person receives them. Widows or widowers’ benefits based on age can start anytime between age 60 and full retirement age as a survivor.

If the benefits start at an earlier age, they are reduced by a fraction of a percent for each month before full retirement age. If a person receives widow’s or widower’s benefits and will qualify for a retirement benefit that’s more than their survivors benefit, he or she can switch to their own retirement benefit as early as age 62 or as late as age 70.

The rules are complicated and vary depending on the situation, so talk to a Social Security representative about your options.

For more information on the surviving spouse’s benefits in

In Canada, for information on survivor benefits

It is vitally important that women empower themselves with knowledge on a range of financial issues so they are well equipped should their partner die.

They also need to know how the household finances were managed well before their finances die or before they get divorced.

Death is a traumatic life event. You may want to see a financial coach to help you navigate the financial complexities involved as a result of this event. The more prepared you are the less likely you are to be caught off guard by financial matters that are requiring immediate attention.

Jennifer was a financial advisor for twenty years before becoming a writer and consultant.

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