Financially preparing for the death of a spouse

Canada Life - Feb 22, 2024
Women may experience unique challenges when it comes to their finances after losing a spouse.
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Coping with the death of a partner can be difficult. Managing your grief while planning a funeral can take a toll.

There can be financial challenges too, especially if you’re a widow. A 2023 Canada Life survey found 74% of women didn’t have a financial plan in place for when their spouse died.

They also said the most challenging aspects about being a widow were:

  • Adjusting to loss of income: 49%
  • Navigating legal/financial paperwork such as executing an estate: 46%
  • Being prepared for a financial emergency: 43%

Tips to financially prepare for a spouse’s death

Be involved in day-to-day money management

Get to know as much as you can about your finances before your spouse dies, including where your money is invested and what accounts it’s invested in.

Review your spending

You may need to adjust your current budget and your financial plan after your spouse dies. Do you have an emergency fund? Can you continue to pay your bills if you lost your partner’s income? Create a new single income budget to help you predict what expenses you might need to trim to be able to live within your means.

Work with an advisor

An advisor can help you:

Review your estate plans

Make sure you both have wills and powers of attorney. Understand the complete financial picture for both of you, including investments, debt, insurance and workplace benefits, and whether you can keep any workplace coverage if your spouse died.

Review your need for insurance

If you don’t have life insurance, disability insurance or critical illness insurance, I can help you determine what insurance you should have. If you’ll lose use your partner’s health and dental benefits after their death, will you need for individual health and dental insurance?

How can working with an advisor to prepare for your spouse’s death?

A Canada Life survey found:

  • Those who worked with an advisor were more likely to have things like life insurance, a will and a financial plan.
  • 67% of widows with an advisor had wills or trusts in place, versus 30% who didn’t.
  • 64% of those with an advisor had life insurance, versus 40% who didn’t.
  • 45% who had an advisor also had a financial plan in place, versus only 6% who didn’t.
  • Many respondents indicated having an advisor helped reduce stress and increase confidence in managing finances.

What's next?

Now that you know how to prepare financially for the death of a spouse, let’s meet to:

  • Discuss your need for insurance.
  • Create a single income budget.
  • Review your estate plans.