When you’re young, we don’t think about death. Adrienne’s powerful story about what happened to her when her husband suddenly passed away at the young age of 46, sheds an enormous spotlight on the difficulties a surviving spouse can encounter when personal finances are not in order. Do you know what happens if your spouse dies without a Will?
Let’s Talk About the Importance of Having a Will
What Happens When Your Spouse Dies Without a Will?
Absolutely all assets in the deceased spouse’s name only, are completely frozen. They include:
- Bank Accounts
- Investments
- Life Insurance Payouts, without a named Beneficiary
Adrienne discovered that without a Will, she had no access to her husband’s money or estate. With two children to feed and a mortgage to pay, she was completely devastated. She was enrolled in University as a student and was just about to write her year-end finals, when her husband suddenly passed away. What could she do?
She was referred to Joanna, founder of the Blackmore Levy Group after she had already encountered a difficult situation with another Financial Advisor. Joanna was instrumental in getting the processes started for a new, positive financial beginning for Adrienne.
- The first step was to find Adrienne a lawyer to start the application to be appointed administratrix (a female administrator of an estate) as her husband did not have a Will.
- Joanna found out that her husband did in fact have a Group Life Insurance Policy through his benefit provider at work. Once Adrienne is appointed administratrix, she can start the process of applying for the Life Insurance death benefit.
- Life Insurance is the fastest personal financial asset to pay out at death, as it by-passes probate if there is a named Beneficiary. However, Adrienne’s husband had not named a Beneficiary on the Group Life Insurance Policy but since she was his spouse, she will receive the funds, after she pays the probate fee on the Life Insurance death benefit and becomes the administratrix.
- Adrienne was also able to apply for the Canada Death Benefit. Once she was named administratrix of the estate, right away she was able to apply for the The Canada Pension Survivor and Child Benefit.
- Because Adrienne is a student, she did not have a lot of money of her own. All their money was tied up in the estate and without a Will she couldn’t access it. Luckily, she was able to borrow some money from her family, so that she was able to provide food and shelter for her children while she awaited probate. By the way, Adrienne’s lawyer told her that, this could take at least 8 months before she was able to receive any money.
If Adrienne’s husband had a Will, Powers Of Attorney in place and named beneficiaries on all of his accounts she wouldn’t be in this awful situation. Adrienne would be able to mourn with her family and not have the added stress of worrying about money!
If God forbid, you were to pass away today and there are loved ones that rely on your income, please make sure that you do have the right amount of Life Insurance with the correct beneficiary, and a current Will & Powers of Attorney in place to protect them.
The Importance of Naming a Beneficiary
Naming a beneficiary is extremely important. Unfortunately, most people don’t give it much thought at all. At some point in your life when you’re buying Life Insurance, setting up investments or when you’re setting up a new benefit plan at work (with a Pension, Group RRSP and/or Group Life Insurance) you will be asked to complete forms which will include a section for the names of your beneficiaries. Many people are unprepared and leave it blank or fill it in too quickly without really thinking about it.
If you do not name a beneficiary on your Life Insurance and Investment Accounts, that money before you pass away, your money will go to your estate (the sum of all your property, possessions, financial assets and debts) by default. Your estate will then go through probate and be subject to otherwise avoidable taxes.
When you name a beneficiary on your Life Insurance and Investment Accounts, that money by-passes your estate and goes directly to the beneficiary, usually, within a few weeks. So naming a beneficiary ensures that your money will go exactly where you want it to go and this can save your loved ones a lot of time and money.
The Blackmore Levy Group are offering a FREE Audit of your Life Insurance needs, so please contact us.
At the Blackmore Levy Group, we go the extra mile. We take the time to to educate you and make sure that you understand exactly what you have, as we talk to you in layman’s terms. “We explain it so you understand it”. We ensure that you receive everything you are entitled to.
At the Blackmore Levy Group together we custom design and build or re-build your Financial House, the right way. We would love to help you.
Contact us today or call us at 1.888.520.6520 for a FREE private and non-judgemental conversation, to find out how we can help you get your personal finances in order.
If you liked this article, you may like to read:
Why Talking About Life Insurance is Extremely Important, Especially During this Pandemic
