Ellen Roseman: How to Deal With Life as A Widow

Losing a spouse at a young age can lead to confusion and disarray if you’re unfamiliar with your finances. It’s time to get ready for the unexpected.

Doris Belland was 32 when her husband Malcolm died. He had cancer for 10 years, but his death still caught her by surprise.

“It never occurred to us it would happen. We had both deluded ourselves into thinking he could continue,” she says.

Malcolm died without leaving a will or life insurance. (The cancer made him uninsurable.) He owned a business, which she joined after they married, but the business was failing and had to be closed.

“This was a huge awakening for me,” she says, adding that she dropped out of a university post-graduate program to help with his business.

“There was no money to deal with his death. I had to dig myself out of a hole and create a new financial life.”

Fifteen years later, she has a new husband and two children. She also has a new business, Blue Ribbon Rent To Own, which helps families qualify for a mortgage by using investor funds to buy the house.

After straightening out her financial mess, she decided to give advice and support to other widows. Her new husband encouraged her to start a blog, called If I Had Known. (She’s now working on a book.)

“If I could rewind the clock and speak to my younger self, here’s what I’d do: Ask myself ‘what if?’ Expect the best and plan for the worst,” she says.

That message resonates with Jennifer Black and Janet Baccarani, who work as certified financial planners and give counsel to widows and widowers.

They have a website, Widowed.ca, as well as a book, Managing Alone: Your Trusted Advisors’ Guide to Surviving the Death of Your Spouse ($19.95),which they published on their own.

Using 10 case studies, based on real people, the authors talk about how to manage your finances at a time of stress.

The first chapter deals with Kayla, 25, a stay-at-home mother of three kids. When her husband Jacob died in a hunting accident, she realized that she knew nothing about her financial situation.

The bank account was in Jacob’s name and was frozen after his death. She had no money. What was she going to do? She knew nothing about insurance, mortgages, bill paying or financial planning.

Since Jacob had no will, Kayla had to fill in forms and apply to the provincial court to be appointed administrator of the estate. Jacob’s RRSP was also frozen because he hadn’t named a beneficiary.

He did have a $50,000 company life insurance policy that named Kayla as the beneficiary. She used it for funeral expenses and other estate costs.

Kayla hoped to get a cash infusion from a mortgage life insurance policy. But to her shock, she learned the policy was void because Jacob had engaged in dangerous activities and had traces of alcohol in his system.

A few years later, Kayla remarried. This time, she was determined to plan for the future and protect her family from financial hardship if the unexpected happened again.

She and her new husband opened joint bank accounts. This ensured the accounts wouldn’t be frozen and the surviving spouse would have access to cash for daily expenses.

They set up automatic bill payment from a joint bank account, so they knew the bills would be paid. And they named each other as beneficiaries of their RRSPs and pension plans to speed up the transfer of assets.

As for Belland, she was holding her assets in joint ownership with Malcolm, which helped with estate administration. But there were few assets left once the business debts were paid off.

“I want to help women, so they don’t go through what I went through,” she says. “You need money to deal with a death. You have to be prepared and plan ahead.”

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca or http://www.ellenroseman.com www.ellenroseman.com END

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