When a loved one dies, the tasks that must be under taken to transition the surviving spouse into their new lifestyle as a single person are numerous and thus, can be daunting. They are mostly performed by the estate trustee appointed under the deceased’s will or appointed by a court. Taking advantage of the opportunity to plan ahead for a death in one’s family, including preparation of a will and an estate inventory of one’s assets and debts, is highly recommended. An estate inventory should include details of asset values, title to assets, beneficiaries designated on RRSPs, RRIFs, life insurance, pensions and TFSAs. Of course, it should also include the instructions of the testator for purposes of preparing the will and powers of attorney. This estate inventory should be updated at least on a yearly basis and will serve many beneficial purposes, especially as a starting point for the estate trustee in terms of carrying out the instructions in the deceased’s will.
I assisted someone who recently became a widower with the financial and legal aspects of their post-mortem transition process. It was helpful to outline in a spreadsheet all assets, debts and ongoing expenses that the deceased had been in charge of paying to enable a bird’s eye glance of the couple’s financial situation. In preparing the spreadsheet, the goal was to help the widower take over the financial management of his affairs. Thankfully,
- Most accounts were joint with the deceased spouse and thus were easily transferred to the surviving spouse
- The couple had little debt; the financial institution which held all accounts advised that it would take payment of a small loan from one of the accounts since it was in the deceased’s name and became due and payable on death
Although achieving this type of scenario has its benefits, please note that everyone’s overall situation is different, especially in terms of family structure, dynamics, obligations and stage of life. Thus, all implications of any planning should be considered, preferably with the advice of relevant professionals, such as a lawyer, financial planner, mortgage broker, accountant, etc.
In light of the comments above, let’s now consider five (5) steps that one may not think of in updating a surviving spouse’s affairs:
1. Change the Title to Any Real Estate that was jointly owned with the deceased spouse with right of survivorship to reflect the fact that the surviving spouse is now the sole owner. This is known as a Survivorship Application and must be done with the assistance of a lawyer. In the recent case for which I am providing assistance, foreign legal counsel will need to be consulted and retained, as the couple own land and a bank account in another country.
2. Change Beneficiary Designations. It is important to change the beneficiary designations that named the deceased spouse. If not changed, then on the death of the surviving spouse, these assets will fall into their estate and may be subject to estate administration tax (probate fees) if a Certificate of Appointment is required. Such certificate may be required to have the court either validate a will or appoint an estate trustee to administer a deceased person’s estate.
3. Determine and Ensure Payment of Expenses. If the deceased spouse managed most or all of the family`s finances, it is important for the survivor to determine the expenses, their regularity, from which account they are being paid and ensure that they have access to all accounts. A bank card may need to be obtained for on-line and automatic teller machine banking; OR accounts may need to be transferred into the survivor’s name which could be more involved if a court probate process is required. The surviving spouse may also wish to adjust their new cash flow scenario by adding or deleting certain expenses.
4. Consider A New Financial Plan. The surviving spouse`s assets and any debt should be reassessed and documented. They should also meet with a financial planner and investment advisor to determine any changes that should be made to achieve goals for the foreseeable future. Life will look and be very different as a single person—perhaps after having lived many, many years in a relationship.
5. Update Will and Powers of Attorney. The surviving spouse should definitely review their will and powers of attorney and update them, particularly if the deceased spouse was their main beneficiary or attorney under power of attorney, as is often the case. This should, again, be done after reviewing an adequate estate inventory of assets and debts and having considered all aspects of the surviving spouse’s situation, including family structure, dynamics, obligations, stage of life, special needs beneficiaries, assets in other jurisdictions, business holdings, etc.
If your spouse has passed away and you would like assistance in updating your legal and financial affairs, please contact Andrea Kelly. Referrals are available, including for other areas of expertise that may be required.
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Andrea Kelly, Lawyer, has extensive experience in wills, trusts, powers of attorney and estate administration matters. She provides clients with a high standard of timely professionalism and expertise, incorporating a very thorough fact finding process. This is quite often enlightening for her clients and facilitates individually tailored services. If you would like to know more, feel free to use the easy contact form or read Andrea’s bio.