If your spouse passes away his or her assets will need to be distributed to you and any other beneficiaries. Different rules apply to different types of assets.
Registered Retirement Savings Plans (RRSP)
If your spouse held an RRSP you can:
- transfer the funds to another RRSP
- transfer the funds to an RRIF
- transfer the funds to a registered annuity with an insurance company
If your spouse had an Annuity when he/she died that was a term annuity and you were named as the Successor Annuitant you will begin to receive the remaining payments. If it was a life annuity and not a term, then payments will stop at death.
Registered Retirement Income Funds (RRIF)
If your spouse had money in an RRIF, the value of the remaining amount in the RRIF can be paid to you as a Designated Benefit. The funds can be received tax sheltered by either:
- Transferring the funds to another tax-sheltered plan such as an RRIF or an RRSP (if you are 71 or younger)
- Taking over the RRIF assets. You will then start receiving the payments and be responsible for paying tax on the yearly withdrawals
- Using the funds to purchase an annuity
Deferred Profit Sharing Plan (DPSP)
As with other registered plans, if your spouse had a DPSP when he/she died the proceeds of the plan can be transferred on a tax free basis into one of the following in your name:
- Registered Pension Plan (if the plan permits)
If your spouse held Non-Registered assets at death there will probably be opportunities to transfer or ‘rollover’ those assets to you without immediate tax implications. Under the spousal rollover rules all assets can be transferred to you without immediate tax consequences.
If your property is registered in joint tenancy With Right of Survivorship (WROS) , meaning both spouses are equal owners, on the death of your spouse, you automatically assume full ownership of the property. This will reduce Probate fees.
Your financial advisor can provide you with more information about the implications of transferring your spouse’s assets.
Here are some experts who can help.
After the death of your spouse, a loved one or friend, you may find that you have been named as the Executor or Executrix. An Executor could also be a trusted friend or an advisor or even a trust company If the deceased did not have a Will or the Will did not name an Executor then the Surrogate or Probate Court will have to be approached and the court will appoint an appropriate person as the representative. This person is called the Administrator and fulfills the same role as the Executor.
Executors carry out the terms of the Will, pay any estate debts, and perhaps make funeral arrangements. Disposition of an estate is a provincial/territorial concern and each jurisdiction has basic rules outlining what the Executor must do. (Please see our links page for provincial government websites). Many properly drafted Wills will also lay out specific responsibilities or powers given to the Executor which actually makes the process simpler. Check the deceased’s Will to see the powers given to the Executor.
Executors are responsible for paying probate fees on the estate. These fees are essentially provincial/territorial death taxes applied to the value of the deceased’s assets. They are calculated based on a percentage; therefore the larger the estate, the higher the probate fees. Probate fees are theoretically intended to pay the costs the government incurs to settle a deceased’s affairs. These are a provincial concern and vary quite widely across the country.
Depending on the nature of the estate, you may want to call in outside professionals to assist in winding up the estate. These could include lawyers and accountants. If an estate is complicated this is certainly advisable.
Although many family members who are named Executors choose not to be paid, provincial law does allow for reasonable compensation for the Executor. If the Executor is paid, there are guidelines established but the court would have the final say on whether the compensation is appropriate. Any reasonable ongoing expenses incurred to wind up the estate would also be paid.
When a death occurs, VAC’s Casualty Support Protocol is invoked. An Area counselor is assigned to the survivor/family. Working closely with the DND Assisting Officer, the Area Counselor will work with the client/family to identify the needs and help access, on a priority basis, the services and programs that are required. The Area Counselor will plan, organize, coordinate and monitor the VAC services and resources required to respond to the needs.
The Death Benefit will recognize and compensate a surviving spouse/common-law partner and/or surviving dependent child(ren) of a member for the non-economic impacts of a sudden service-related death, which includes the member’s loss of life, the resulting loss of guidance, care, companionship and the impact of the member’s death on the functioning of the household.
The Death Benefit and Disability awards payable under the CFMVRCA, which are administered exclusively by Veterans Affairs Canada, is separate from CFSA. No contributions are made and the benefits are not dependent on average pay or years of service, but rather on the extent of the member’s disability.
When the death of the CF member/Veteran is related to service, Vocational Assistance, including rehabilitation services, is available based on need to the surviving spouse/common-law partner.
When the death of a CF member/Veteran is related to service, the surviving spouse/common-law partner and orphans are eligible for the Earnings Loss Benefit and the Canadian Forces Income Support. Survivors/common-law partners are also eligible for the Supplementary Retirement Benefit.
Health Benefits Program
When the death of the CF member/Veteran is related to service, the surviving spouse/common-law partner, if not otherwise eligible for the Public Service Health Care Plan, can enroll in the Public Service Health Care Plan through the Health Benefits Program and obtain coverage for themselves and their family.
Education Assistance may be available to help children carry on their education past high school if they have a CF parent who dies as a result of military service. Under the program, full-time students can qualify for grants to help pay for their education costs and living expenses.
Answers via Veterans Affairs Canada. For more information www.veterans.gc.ca. or contact one of VAC’s toll-free numbers at 1-866-522-2122 (English) or 1-866-522-2022 (French).
The death of your spouse or a loved one can mean changes in your life and your life goals. You may want to re-evaluate your strategies for balancing your priorities and making progress towards achieving your revised financial goals.
Take this opportunity to review your priorities and consider asking yourself or your financial advisor these questions:
- How do I transfer my spouse’s investment assets into my name and what documents will I need?
- Will I need to create a new investment portfolio?
- Do I need a new Will?
- How will my estate plans change?
- Should I consider transferring assets to my family now?
- How will my Budget change?
- I may decide to sell my home, what are the implications?
- Will I need new or different insurance coverage?
- What is involved in being an Executor?
Here are some experts who can help.