When a Partner Dies
Posted by Gail | Filed under Money & Family
I’ve received a number of letters recently from women whose husbands have died suddenly. In a split second, everything about their lives has changed. Often it doesn’t take very long for the focus to shift from grief to worry as the financial challenges start to rear their ugly heads.
Many stay-at-home moms are left with a whopper of a mortgage and no way to earn an income, at least in the short term. Some have credit card debt. Some can’t even get at the money in their partner’s account because those accounts aren’t held jointly and have been frozen. While some credit comes with creditor insurance, I’m not a fan of these options unless you can’t qualify for well priced life insurance elsewhere. Single purpose credit insurance is a great money maker for lenders, and I’d much rather see people protect their families with broader purpose insurance.
Making the funeral arrangements can be a huge emotional drain since the decisions have to be made at a time when you’re least able to make decisions. If you plan your funeral and leave a nice tidy file, you eliminate most of this aggravation for your lovie. Failing that, a trusted friend or family member is the perfect person to do the hard work of comparing prices, engaging a funeral home, obtaining a burial plot, and handling the obituary announcements and calls to family and friends.
For people who find themselves cash poor, the next step is to cut expenses and find some way to increase cash flow. Call your creditors and explained what has happened. See if they will give you an interest holiday (even a few weeks will help) or transfer your balance to a less expensive form of credit. Check to see what’s being automatically debited from the bank account that could be stopped. If you know there will be crimps in your cash flow, apply for overdraft protection. The last thing you need is to ruin your credit history with NSF cheques.
If your partner has been contributing to the Canada Pension Plan, call the people at CPP, along with the people at Old Age Security and Worker’s Compensation since they each may have money to help see your through. There’s a one-year limit on the payment of retroactive benefits, so file the paperwork for CPP benefits as soon as you can. Any income you receive is taxable, so set some aside for the Tax Man. CPP also has a monthly orphan’s benefit paid for children under 25 as long as they are in school. This is considered the child’s income and taxable in his or her hands and the money is usually held in trust. If you really need to, you can get your hands on it, but you’ll have to explain why.
Call your partner’s employer and find out what the final payment (salary, bonuses, and vacation pay) will be coming to you. Ask if there was a life insurance plan in place. And ask for a summary of his income for tax purposes. If your partner was receiving a pension, you may be entitled to a death benefit, or to a continuation of payments, though those payments are often reduced. If your partner’s death puts an end to your insurance and health benefits, you’ll have to shop around for your own.
To make legal or financial changes — everything from transferring assets into your own name, changing the license plates on your car, or making an insurance claim — you’ll need to provide proof of death. Ask your funeral director for 10 copies of the death certificate to see you through.
Once the dust settles, book an appointment to change your will, powers of attorney and any other documents in which your partner was named. Change the beneficiary designations on your own insurance, RRSPs, RRIFs, or anything else on which your partner was your beneficiary. And if you have minor children and haven’t yet named a guardian for them, the time to do so is NOW.
As you look for help to see you along this rough road, stick with friends and advisors you know and trust. Don’t sign documents, lend money, or pay debts you’re unfamiliar with until you’re thinking clearly. Get yourself a notebook and write everything down: your phone conversations, what you have to do, how you’re feeling. When a friend of mine’s husband died, I gave her a notebook with strict instructions. She later told me this was the very best thing she did during those early weeks since it helped her to stay focused and not forget the important things. “I even had to write down, ‘pick the kids up from school’,” she said as she laughed remembering just how scattered she was. It’s a tough time. Help yourself by making notes.
Each time I hear from a woman who has been thrown into widowhood, I cry and count my blessings. It’s the way life can suddenly change that makes me feel so vulnerable. But as a woman with children I know I have a huge responsibility to take care of both my babies and myself. Putting the details in place when everything’s perfect is the best way to do it. Waiting until your world is shattered is just too hard.
September 1, 2009 at 7:28 am
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September 1, 2009 at 9:19 am
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September 1, 2009 at 9:44 am
Just a note on creditor insurance — what a terrible product. Typically it’s something like 94 cents per $100 coverage of your credit card per month. That means a $1000 balance each month costs you an extra $9.40 per month, or $112 per year. For $1000 coverage! You can get life insurance for $250,000 for $400 a year.
September 1, 2009 at 9:48 am
I keep a master file where I list everything:
- bank accounts labeled with who owns it (joint or not) and where its at (bank),
- RRSP’s/TFSA/RESP (bank, balance, beneficiary),
- Loans (ie mortgage – bank, balance),
- Bills (ie, water/hydro/gas, company, who is it registered to, billing date)
- Any pre-authorized payment (company, billing date)
- Insurance (ie.car/house, company, billing date)
- Life/Critical/Disability (company,coverage, policy #, contact info)
- Storage where I kept major documents (ie passport, birth certificates, marriage cert, will and like)
- Any other information that my husband and I think might make it easier for the one left behind.
I found that after I created this document, I felt more at peace knowing that whoever is left behind, he/she can pick up the pieces right away.
And definitely arm yourself with knowledge NOW.. the best time to do it is now.
Btw, Gail, I’m getting mixed information re: what happens to joint account if one spouse pass away. One side says its accessible to the other spouse, one says its frozen till the probate is over. Can you please clarify?
September 1, 2009 at 10:13 am
Just a note – the CPP does not pay out widow pension until you are 65 if your partner dies when you are under 35 and have no children. I found this out when my fiance died when I was 30 (three years ago).
After a problem with the employers life insurance I ended up getting only half of the life insurance (even though I was listed by the employer as full beneficiary).
Will no CPP payments and only half of the insurance payment the past 3 years have been tuff.
September 1, 2009 at 10:22 am
To the younger married reader, I can’t stress enough that you make sure you have enough life insurance on your mate. It is amazing how, when you get older (and I only mean 40’s) how life can through you curve balls. Last year my husband went through cancer treatment for Hodgkin’s. We have a couple of small insurance policies for him and our mortgage and LOC were insured. Just and example of why it is a bad idea to insure these instruments is that now even though he has been cancer free for 1 year, there isn’t an insurance company that will insure him, so we will be forced to leave our mortgage with our existing lender so that we don’t lose that insurance coverage.
I have been proactive with my teenage boys and ensured that they have term insurance with a guaranteed premium for 5 to 20 years – depending on their age. They are set for a long period of time. They may not have dependant right now, but we all know how quickly that can change.
I agree too about making a list of all account, policies, etc. I have started one because I handle most of the finances and my husband would be lost without me.
September 1, 2009 at 11:57 am
H-U-G to answer your question, my husband’s first wife passed away and he learned that for the joint accounts, the answer is “it depends.”
One person is almost always designated the primary account holder. If the deceased was the primary account holder, then the account can be frozen until probate is complete (depends on the lender). If the survivor is the primary account holder, a death certificate to remove the deceased from the account is all that’s needed.
Also, to those living in this digital age, it’s also a nice idea to have a file available to your spouse (keep it in the safe deposit box!) with all your online accounts and passwords, and your wishes for those accounts and profiles once you’re gone, so they can go in and cancel things.
September 1, 2009 at 12:12 pm
Death, unfortunately, is inevitable.
Doing some planning, preparing, discussion, and insuring is the best way to help those left behind to be better equipped to cope.
In my many years as an adminstrator in the banking world, I saw lots of spouses, and families struggle. I had a checklist that I would give to the executors that was filled with the little details that many generic checklists missed.
In my own personal experiences, I have seen my family, inlaws, and friends have a difficult time after the death of a loved one. Whether it was a spouse or a parent. Do what you can to help. Support is always appreciated.
Make sure you have a will. Whether you are married, or single, or whatever… Keep it up-to-date ! Let your final wishes be known to those that will be left behind. It really helps them in making final arrangements.
Keep your financial documents, and all account information in one location. From your bank accounts, to your utility bills, to your insurance documents, to your house and car papers… And make sure the person who will be looking after your affairs knows where this is all located. Talk about it. Keep no secrets.
And for those with a spouse and/or children… life insurance is always a good plan. Get it ! It’s a much better thing than just credit insurance on your mortgage or credit products.
I really like the idea of the notebook, Gail. I’m sure a lot of people could benefit from that tool.
September 1, 2009 at 12:13 pm
My husband passed away in December 2007 (suddenly) as well. My two children and I were left with nothing; no will, no life insurance, no CPP, and a huge debt. I worked a 30K a year job at the time and will never forget the despair of a debt along with the despair of loosing your life partner. Thankfully we pulled through by calling lenders, family members and budgeting everything. But, life would have been much easier if we had planned for this… it’s tuff to think about, but so worth it.
September 1, 2009 at 1:25 pm
Yes too many people realy don’t have all the wills done up, power of attorney (which ceases to on death),personal care docsetc.
If you run on one car its handy to have it in both spouses name to, that way one of you passes other can hop in and drive it.
Better to see a lawyer and get it done now before an issue.
September 1, 2009 at 2:39 pm
Margaret, great idea insuring your boys. I was diagnosed at 24, with a disease that was suppose to kill me in 18 months. 15 years later, I am still here and married with children. However, it suck that I am unisurable for life insurance. I tell every single person I know who is over 17, that they should spend the $20 per month on a few hundred thousand dollars worth of life insurance. Because you never know what your future health and family circumstances might be.
September 1, 2009 at 2:42 pm
I’ve just printed Gail’s article today and put it in our ‘Financial Binder’ – which also has a copy of our wills, etc. Lots of good tips from all your readers today. Thanks!
September 1, 2009 at 3:44 pm
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September 1, 2009 at 5:08 pm
I have already printed out 10 copies of this post and am going to spread them around.
My Mom always used to say that there is nothing worse than being a widow/widower/divorcee except being a widow/widower/divorcee with no money and even worse than that is to be a widow/widower/divorcee with children and no money.
I think to make things even worse would be to be a remaining partner who had no idea where their finances stood. I have always known the state of our finances (a mess mostly) and used to make sure my husband knew as well even though this meant tying him to a chair and forcing him to look but I have had five friends who were not only blindsided but who were completely in the dark.
One was an aeronautics engineer whose husband died in a car accident. She never even thought about finances – left it all to him – just handed over her pay cheque and took an allowance for clothes and grooming. She discovered that they were maxed out on all credit cards -three that she didn’t even know they had – and mortgaged to the hilt. She also discovered bank drafts being sent to a woman in another city and that their taxes had not been done in 5 years.
Another lost her husband and the father of her kids to a heart attack. Found out that they had no savings only debt and that he had canceled his life insurance years before. The family ended up split apart with two kids going to live with the in-laws and the baby with her sister while she tried to get a job and put her life together. No idea what happened to her. She disappeared.
Another was not technically a widow but she would have made herself one if he had ever set foot in Canada again. He took off with his girlfriend for Thailand leaving her with a very sick child, all the debt from a failed business that she thought was doing well enough to be paying for their lavish life style because he told he so, a half million dollar home already under foreclosure and gambling debts – she found this out when a thug came pounding on her door. She had to declare bankruptcy and it took her years to get an education and then to recover even a little bit financially.
A friend of my Mom was just getting ready to retire when her husband took off for Sweden – taking everything with him. Even took her jewelery. He had been the bookkeeper for her business as well as for their private life and had not only run everything into the ground but mortgaged it to the hilt and scammed the government – taxes, ICBC etc. She fought him tooth and nail in the courts but then the swine took the easy way out by dying. Unfortunately all the money had disappeared. The suspect was the daughter from a previous marriage but no proof. She is now 74 and still having to work as a physiotherapist.
The mother of my best friend growing up just left one day. She took what they had and never looked back. She didn’t die but she killed her kids and husband. The father had no idea and sadly it was she who was the major bread winner so she had always handled the money. He hanged himself in the basement about a year after she left, was discovered by my friend. They were about to be kicked out because of owing so much back rent but his note said that he just couldn’t live with the guilt. Apparently he had been taking his rage out on the kids – beating them. I never knew a thing until they were taken away by the police.
Looking back I find it hard to believe that all just trusted someone else with their finances and never even looked. Because of this they had to endure so much more than just death or abandonment.
I have another friend who is very smart and understands money but she prefers to be an ostrich. She doesn’t even know where their mail box is located (and doesn’t have a key anyways) or a debit card to their account or even know if they have a savings account. Her husband is a lovely man but he is old fashioned and is the head of the house or else. Unfortunately he is a lot older and has health issues mostly because they have so many financial problems. She is headed for deep doo-doo as Gail would say. She is getting a copy of this post.
September 1, 2009 at 5:54 pm
Some people better read Maureens post and take heed!
Love is indeed ah blinding!!
PS: theres no badge handed out for stupidity either!
September 1, 2009 at 6:43 pm
As for CPP, if you are making a claim for the survivor’s benefit, your age will depend if you will get a payment or if there will be a delay. You need to submit a copy of the proof of death and a copy of your marriage certificate to confirm that you are entitled. you can make a claim to cpp for eligible in school child including post secondary.
Notify CRA as well, it can impact your GST payments if you are receiving them. make sure you also complete a martial status form.
The funeral homes normally will give you 10 copies of the death certificate and also include a booklet on things that need to be done.
September 1, 2009 at 7:48 pm
Joint bank accounts need to be marked “joint with right to survivorship”..it’s a little box that gets ticked off when the account is open…if you are not sure about your accounts, just stop into your bank and ask…if it’s not already set up like that you can easily make the change…then, if one party dies the funds are automatically the property of the remaining party…
September 1, 2009 at 8:14 pm
Life insurance is not that expensive. I started mine 6 yrs ago, for 150K, I pay $15/month. I also have critical illness insurance $14/month. I’m 37, and a non-smoker.
September 1, 2009 at 10:13 pm
Good grief Maureen,
Where do you meet these people?!
September 1, 2009 at 10:40 pm
Diana — to me Maureen’s anecdotes are more the norm, rather than exceptions. Unfortunate, but real life. Amongst my relatives, friends, and work colleagues — stories like Maureen’s happen more than they should. The challenge is to protect oneself without becoming a bitter cynic. I think Gail’s teachings are great for showing us how to do that. Thanks for keeping it real, Gail (and Maureen) while keeping a great sense of humour and a sense of optimism.
September 2, 2009 at 12:37 am
I remember when my parents travelled once when my grandmother was looking after us, my dad showed her where the “binder” was kept. At the time, all I knew that was in it was any and all information my grandmother would need in the event something happened to them while they were away.
My Mother died when I was 17 – my dad was 45 and a widower, my sister was 13 at the time. It was a 6 month illness so not sudden but I do know that my parents likely had a lot already in order prior to her death.
It is one reason why as the “bread winner” myself that every account/investment that my husband and I have – is joint – I want him to have access to it especially since we have 2 young children. I know our investments are “joint with right of survivorship – but I will have double check and make sure our bank accounts it set up like that. I should create the “binder” with all the important documents though. However, my files themselves are pretty well kept – my financial adviser is impressed when he can ask me for something and about a minute later I am handing it to him :0)
September 2, 2009 at 1:00 am
Hi Diana
Just everyday normal people. Ya never know what is going on behind closed doors. What is really sad and dangerous is when one partner in a relationship does not know what is going on behind their own door. I believe no relationship can survive without trust but I also believe a little PYA (protect your a**) is also very important. At least have some mad money stashed in your underwear drawer!
The aeronautics engineer was my neighbour for nine years when we lived in the country.
The lady who lost her husband to a heart attack and this split up her family was my Father’s assistant (worked for the government and NASA) until she left to be a full time Mom. I knew her from the time I was about 13 and she was lovely. Her husband was just 32 or 33.
The lady whose husband ran off to Thailand was at college with me. Her husband ran a very successful construction company and they seemed to be a very happy family. Apparently the girlfriend was someone he met while working in Thailand and he actually brought her to Canada and set her up in a luv nest.
My Mom’s friend was also her physiotherapist. She became a client of my bookkeeping business when the swine ran off and then died.
My best friend was my best friend from kindergarten to grade 4. I never saw her again after her Dad killed himself.
The friend heading for trouble because she does not want to know and loves her husband but is tired of fighting to change someone who won’t change is actually a relative. I keep telling her to protect herself but….sometimes all you get to do is help pick up Humpty Dumpty.
September 2, 2009 at 6:04 am
“Truth is stranger than fiction”…but many refuse to believe.
September 2, 2009 at 2:40 pm
Freckles and John
Yes, all just normal and yet stranger than fiction.
We have always had life insurance on each other to protect each other. Now given our normal financial behaviour it is odd that we actually did something right but we cannot even take credit for that. Stumbled into it.
A work colleague’s husband was just starting out selling insurance and we couldn’t say no. A year later he left the company but before he did he phoned us and said “Never give up this policy. They will try everything to get you to change but don’t do it. This was a bad policy from the company’s point of view and is discontinued because it is just too good for the insured.” Every ten years we get a cheque in the mail for 80% of what we paid during that 10 years so in effect we get the policy for just 20% . In 18 months we get another $10,000 back. Yipee!
We sit here feeling very smug but I know that if we hadn’t stumbled into this at the age of 21 we would not have bothered. After all when you are young you are invincible and you always have something more fun to do with the money that would be spent on life insurance. Then of course by the time you realize you actually need this you are older and it is harder to get and more expensive.
Stranger than fiction? In the past 3 years we know (know, not just have heard of) a man who was decapitated by a helicopter blade, a man who died on of a brain anyeurism while with his wife on a canoe trip, a woman who drowned in a boating accident on her honeymoon, a man who died of a heart attack just after his wife left on a work related retreat so the baby was alone with the body for 2 days, a woman who died in a car accident while on the way to her parents funeral who had died in a car accident, a man who died in a plane crash – actually survived the crash but froze to death, a woman who died of an allergic reaction while undergoing treatment for cancer and a man who was cleaning the gutters and fell off his roof and broke his neck. He was a high steel worker.
All of these people were under the age of 40. All were married and except for the man who died of the aneurisym all had children. None had life insurance (other than some through work which in all cases added up to only a year or two of salary) and two had no mortgage insurance. All had a lot of debts. What a mess.
I think a great gift that parents could give their kids the minute they have grandkids would be to offer to pay life insurance premiums. Not much to look at under the Christmas tree but what peace on Earth this could buy.
September 4, 2009 at 12:12 am
oh Maureen!
(Colleen, would you like to share the detailed list?)
Gail, all of it is great advice. Call me paranoid, but I’ve had a will and life insurance since I was young and single. My husband is not quite so paranoid and it took ten years of me nagging to get him to get me joint onto his account (in case something happens to either of us) and talk him into getting a will while revising mine to add the last baby. At least he agreed to the life insurance as soon as we had our first baby! All his ducks are in a row now, and I am proud of him for it.
We have a “binder” too with a complete list of our insurance providers, bank accounts and investments and even our lenders (mortgage etc). It is so handy having it centralized!
September 5, 2009 at 10:44 am
This article touched close to home for me.
My dad was one of those people who thought they were invincible and hated insurances of any kind. As you can imagine, when he got diagnosed with lung cancer, he couldn’t get life insurance. When he died, I was graduating from high school and heading off to University and my mom was left a widowed housewife with only enough money to cover the funeral costs.
After dealing with the grief, a few months later when I was 18, we both realized (the hard way) how important life insurance is to take care of the ones you leave behind. We both drew up wills and power of attorneys and got life insurances. I am so thankful now that I have life insurance in place when I was young and healthy because a few years ago, I was diagnosed with a liver disease and now if I apply for any additional coverage, I either do not qualify or I would have to pay a hefty amount in premiums.