Having a conversation with your partner about the passing of a spouse will help you both prepare for this emotional event and can avoid leaving someone in a financial mess.
It’s common that one person manages the finances and does the financial planning, but that only works if they’re keeping the other informed. So, be open and honest about your finances with each other.
To make dealing with this process easier in the future follow these few tips:
Review Your Estate Plan and Insurance Policy
Having life insurance can provide some financial security. Update your policy and estate plan after any big life changes and make sure beneficiaries are people you’re still comfortable with.
Once you have a good understanding of what your finances will look like, you can plan for the future by asking yourself:
How will this affect my day to day life?
How will this affect my long term investment plans?
What will this affect have on our children’s life/future?
Adjust Your Budget to Reflect the Changes in Your Responsibilities
If you have kids, things will change drastically for both you and them. Your responsibilities will shift, which means your expenses could change. Take time to figure out how you’ll need to reallocate where your money goes to meet the needs of your kids as a single parent. For example, you might need to consider daycare costs or open a separate savings account to help fund their sports/hobbies.
Pensions and Other Benefit Plans
The surviving partner may receive their partners Canadian Pension Plan (CPP). You should apply for this benefit as quickly as possible after the passing. Depending on how long your partner contributed to their CPP, you may also qualify for the CPP death benefit, which is a one-time payment of $2,500; for more information contact the Government of Canada.
If your child is under age 18 or under age 25 and is a student, they could qualify for a surviving child's benefit.
Worrying about your finances after the passing of a loved one, or worrying about your partner should you pass, is something neither of you should have to do. Having the conversation now can help alleviate stress and simplify things during a hard time. Book an appointment with one of our expert Advisors so you can be prepared.
