Death Of A Spouse
The death of a spouse is devastating. Accompanying financial losses can compound the devastation.
If your spouse managed the majority of the financial responsibilities, even just paying bills can seem overwhelming. But you can work your way through it. It is manageable.
Try not to make any long-term decisions right away. Take your time. Emotional upheaval does not leave you in the best frame of mind for solid decision-making.
Gathering the proper paperwork is the first step in settling your spouse's affairs. Start with the following:
- Death Certificate
A certified copy of a death certificate will be needed for many financial procedures. It is only available (through the appropriate provincial vital statistics office) to the next of kin, the executor or the estate administrator.
- Insurance Policies
These will help you determine what benefits you are entitled to.
- Marriage Certificate
If you can't find your marriage certificate, you (or your children) can order a copy from the appropriate provincial vital documents office.
- Birth Certificates
A birth certificate can be applied for at a vital statistics office by the next-of-kin or executor.
- Certificate of Discharge from the Military
If your spouse was in the military, you may need his or her certificate of discharge to collect benefits.
- The Deceased's Will
- A Complete List Of All Property
Many of the documents you need may be held in a safe deposit box. If you can open this safe deposit box before your spouse's death, take out all the contents of the box. In some cases, safe deposit boxes are sealed after a death, even if the box is registered in both your names. If your spouse has already died and the box is sealed, consult your attorney about getting court permission to access the box.
Get Your Finances In Order
If you receive a life-insurance benefit, save that money. Put it in an interest-bearing account, but keep it liquid. You may need it.
Make sure you have dental and drug benefits. If your coverage was courtesy of your spouse's company, inquire to see if you're still covered and for how long. If you're not, you might look into private coverage.
Use the paperwork you gathered to claim the following:
- Life insurance benefits
Most likely, the company will pay the proceeds directly to the named beneficiary in either a lump sum, fixed payments or as interest payments on a larger amount. It may take several weeks for you to receive payments. If your spouse is named as your beneficiary on your life-insurance policy or retirement plans, you should take this time to name another beneficiary.
- CPP Survivor Benefits
Canada Pension Plan survivor benefits are paid to a deceased contributor's estate, surviving spouse, or common-law partner and dependent children. There are three types of benefits.
- The death benefit is a one-time payment to, or on behalf of, the estate of a deceased Canada Pension Plan contributor.
- The survivor's pension is a monthly pension paid to the surviving spouse or common-law partner of a deceased contributor.
- The children's benefit is a monthly payment for the dependent children of a deceased contributor
- Employee benefits
Your spouse may have had life insurance, Group RRSP, vacation or sick pay, or other benefits to which you're entitled. Contact the human-resources director at your spouse's workplace for a list of benefits.
- Veterans' benefits
If your spouse served in the military, contact Veterans Affairs Canada. Following December 3, 2003 regulatory amendments, qualified survivors of deceased veterans may be eligible to receive housekeeping and/or grounds maintenance services, for as long as needed, under the Veterans Independence Program (VIP).
This is just a brief introduction to some of the tax issues facing you. Taxes can be quite complicated and you should consult a professional tax advisor for more help.
You must file a final income tax return for your deceased spouse. In general, what happens is that your spouse's capital assets -- things like land other than a principal residence, stocks, bonds and the like -- are "deemed" to have been sold at fair market value on the date of death. Any resulting capital gains must be included in the deceased's income for tax purposes for the year of death. Those gains are added to the income (salary, etc.) received by the deceased person prior to her death during the tax year. The amount of tax payable can therefore be quite substantial and the rules for calculating the gains (and any losses) and figuring out the tax are very complicated. That is why you are well advised to obtain professional assistance.
Some Smaller Details
Review your will and make adjustments to reflect your new situation. You'll probably need to change the name of your beneficiary and you may need to decide on a new executor. Change bank accounts, credit cards, deeds and jointly held property into your name alone.