The Discussion: Finances, Death, and Family
– Ray Hoger | Chair, Pension & Financial Wellness Committee, ARTA
I’m sorry, but I have two pieces of bad news to deliver. First, you are going to die. Yes, I double-checked the statistics, and there is no doubt about it. The second bit of bad news: your spouse (or other family member if you have no spouse) may not know what financial challenges or obligations you have, or where you have them! Many couples have one “financial manager” between them for family finances. What happens if the manager dies first? Have you had the discussion with them? Here is a collection of some things you might consider discussing.
What about the will? Both spouses and the proposed executor should know where a copy is located and who the lawyer is. In addition to this document, where are other important documents such as your marriage licence, birth certificates, social insurance numbers, bank records, insurance policies, lists of assets, recent tax returns, and perhaps, baptismal certificates?
Many of the items listed above can be accessed online. Do you have a list of passwords for all sites? This list might include bank accounts (maybe for several institutions), online trading accounts, insurance policies, and of course the Canada Revenue Agency (CRA) online portal in addition to the My Service Canada Account. These last two sites are both government sites, but they are not the same and do not necessarily share passwords.
If the deceased was a Canada Pension Plan (CPP) contributor, you will want to apply for the death benefit, a one-time payment of $2,500.00. You may also qualify for the survivor’s pension (conditions apply) of up to sixty per cent of the deceased partner’s CPP pension. You must apply for both of these within a year of the death or there will be a loss of benefits.
Although the Old Age Security (OAS) benefit is rather small, you are allowed to receive the benefit for the month in which the pensioner passes away. There is an allowance for survivors if your income falls below an income threshold of less than $27,240. This amount is adjusted annually.
You should also notify CRA if GST credits are being received in order to discontinue them. In addition, CRA expects a personal tax return for the deceased to be filed within six months. You will want to request a Tax Clearance Certificate from the CRA. The clearance certificate confirms that an estate has paid taxes and other amounts owing at the time the certificate was issued.
In addition, Alberta Health Care Insurance, any additional health care plans (like your ARTA Benefit Plan), life insurance claims, Alberta Seniors Benefits (income qualification), motor vehicle registration and insurance, and homeowner’s insurance need to be notified of the death.
Cancel their passport, subscriptions, and memberships. Pay off credit card balances and cancel the cards. Are there “awards points” that can be transferred? You will want to arrange name changes for titles to real estate and other investments owned by your partner.
If you have separate bank accounts, RRSPs, RRIFs, or annuities, all of these must be notified in a timely manner. Is there a safety deposit box? Where is the key? Lastly, of course, your pension provider (ATRF for many of us) needs to be informed of your life changes.
Many of these organizations will require a Funeral Directors Statement of Death — a form that states the name, date of birth, date and place of death, usual residence, age, and gender of the deceased person. Funeral homes typically include a number of these statements as part of their service package. An official death certificate is issued by the province and contains much of the same information. A local registry office can help with this, for a fee. The death certificate will be required for some real estate transactions, larger insurance claims, and probating a will.
On a positive note, most funeral homes can take care of many of these forms, needing only your signature and the specific details of the deceased. Having all this material at your fingertips is one less challenge during what is sure to be a very difficult time.
Many people find discussing their death ghoulish or morbid, and really want to ignore it for as long as possible. Having the discussion is far from morbid. It is actually a freeing experience and allows those who we love and are left behind to take care of a major challenge.