What to do when your spouse dies
Written by Glen James
Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing.
Listen to the Retire Right podcast episode on this topic:
No one wants to think about the day their partner dies—it’s a sad and terrifying thought. When you’re in the deep end of working through your grief the last thing you have headspace for are the practical things you need to work through. So to give you a hand here are the key financial and estate tasks to consider (maybe print this or save it for later):
#1 Make sure you are ok
I cannot go any further without acknowledging your grief, which can take many forms. It is critical that you get the support you need and give yourself space and time to grieve. Contact your GP to discuss your health and emotional needs, or contact Griefline who offer grief and loss support. At times like these you can also reach out to your children, relatives, friends, church or sport groups and use the support of your community. We all need help sometimes, there is no shame in reaching out for support when things get tough.
#2 Obtain the death certificate
In moving onto the more practical things, one useful document you will need moving forward is the death certificate. Ensure you have multiple certified copies. Many of the banks and institutions you’ll contact will require a death certificate to make changes to accounts or logins.
These documents are created by state and territory governments and can take some time to be delivered. A funeral director can make the application on your behalf. If a funeral director is not completing the death registration process for you, you can register a death if you are a next of kin or relative of the deceased by contacting your local state/territory government authority here.
#3 Review the Will and estate planning documents
Now is a good time to understand your partner's wishes in their will and estate planning documents:
Locate the will and review its instructions.
Contact the executor of the estate.
Consult with a solicitor to understand the legal process and obligations.
Initiate probate if necessary.
Your partner's estate planning documents may also outline their wishes for a funeral, and whether any funeral plans have been outlined, prepared or paid for (this isn’t always the case, however). Be aware that working through someone’s estate can take many months, even a year or more, depending on the complexities of their affairs. Don’t rush, take your time, and focus on working through one detail at a time. Give yourself breaks and ensure you have times of rest and distraction where you aren’t focused solely on working through their affairs.
#4 Notify relevant institutions
An important task is updating the accounts where your partner was previously listed. This job might take several months, even a year, to do for all the accounts your partner had or shared with you, including:
Utilities like electricity, gas, water, rates, Internet, phone, etc.
Your partner’s employer if relevant.
Banks, superannuation funds, and financial institutions.
the Australian Taxation Office (ATO).
Centrelink (more on this soon)
insurance companies (life, health, and home).
any organisations they were a member of—whether sporting, community or hobby group.
#5 Manage bank accounts and debts
This is also an important time to contact your partner's banking institution. Many banks will have their own checklists and processes for when a partner passes away, so give them a call and enquire:
Determine if any accounts are joint or solely in your partner’s name.
Close or transfer ownership of joint accounts.
Settle any outstanding debts or liabilities.
#6 Superannuation and life insurance
Take this opportunity to contact your partner’s superannuation fund to understand the death benefit process. The process will vary depending on their fund, and whether your partner has established binding or non-binding beneficiaries. You may also make a claim on any life insurance policies (if relevant).
Let’s have a quick discussion about binding vs non-binding beneficiaries in superannuation, so you’re aware of what you may come across as you work through your partner’s affairs.
Let’s say Thelma sets up a super fund, with no beneficiaries listed. If Thelma dies, what happens? When there's no beneficiary in place, it goes to the super trustee (that's the head honcho of the super fund) to use their discretion. So, if Thelma were to pass away prematurely, and she had $300,000 in her super, and there's no beneficiary, there will likely be a panel of people making a decision about that money? Remember, superannuation is a trust. The trust operates for the benefit of the beneficiary. And as superannuation is a trust, the trustees are making decisions for the benefit of the members.
I saw this happen once with a super fund, where a family friend passed away, there were no binding nominees listed, and it took six months to pay the death benefit. Part of the problem is some trustees will only meet a couple of times a year, so you might have to wait until they meet again before a decision is made. Keep in mind that superannuation does not form part of your estate, it falls outside of that. So working out what happens to your super money is a whole other process upon your death. And as an asset it doesn’t automatically go to your spouse, for example. You need to specify where you want it to go.
So there's effectively two types of beneficiary nominations. As the name suggests, a binding nomination is legally binding. A non-binding is what I call a ‘polite indication’ of what you would like to have happen. Think of it like an intention for the money to go to X person.
If it was a non-binding beneficiary, trustees would note that intention. So let’s say a mum passes away and three people challenge the trustee: two children believe the money was meant for them, but the nominee was her new husband. The trustees will take into account that while it is non-binding, that she had some intention for it to go to the new husband. But the key word is discretion (out of your control).
#7 Consider any tax implications
An unusual fact you may not be aware of is that you must file a final tax return for your partner—yes! Contact your accountant and use their support and professional advice to work through any tax matters that might arise following your partner’s death:
Determine any tax liabilities that may arise from your partner's affairs.
File a final tax return for your partner.
Review any tax implications for your estate and beneficiaries.
#8 contact Centrelink
If you’ve been receiving a pension or any kind of support from Centrelink it’s important to contact them and let them know of the change of situation, as benefits can change when your partner passes away. It’s helpful to contact Centrelink and read through their checklist to fully understand your situation:
Are you eligible for a bereavement payment?
Was your partner owed any money from Centrelink?
Will there be any changes to your age pension? For example, your age pension may move from a couples rate to a singles rate, and your income and asset test may change the benefit you’re eligible for.
#9 Update major financial documents and accounts
Depending on your your situation you will need to update names on any key assets your partner owned or you owned together:
Update ownership details on property, vehicles, and other assets.
Change or update beneficiaries on your superannuation and insurance.
Review and update your own will and estate planning documents.
#10 Review income and expenses
Once the initial wave of their passing has subsided, it is helpful to reassess your budget. If it’s helpful please use my Glen James Spending Plan—it’s a free budgeting tool that thousands of people have used. This is a good time to assess your financial situation, including income sources like superannuation, pensions and investments, especially if they have changed with your partner’s passing. Adjust your budget and manage ongoing expenses as you need, and consider seeking advice from a financial adviser if that would suit your situation.
#11 Plan for the future
This will certainly feel sad to think through, but determining what your life looks like from here onwards is an important step. Have a think through:
Your lifestyle: where you would like to live and the kinds of activities you’d like to be involved in.
Your financial plans, including retirement plans.
Your health care and aged care plans.
Your financial situation with a financial adviser or close family member if appropriate.
Take this time to remember and commemorate your partner. They have played a significant role in your life and no doubt you have a journey ahead of you as you adjust to life without them. I give you my condolences, and I hope this list is helpful to you as you work through this difficult time.