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Sudden death in family

When a friend's husband died suddenly a few years ago, financial planner Jennifer Black saw that the family wasn't getting all the children's benefits from the government to which they were entitled.

So she helped walk her friend through the right steps to get them.

"I realized at that point that she couldn't be the only one," Ms. Black says. So she started as a resource for new Canadian widows and widowers, in conjunction with her Mississauga financial planning firm Dedicated Financial Solutions. Together with her mother and business partner, Janet Baccarani, Ms. Black regularly helps clients through this difficult time: figuring out cash flow, building new financial plans and getting their feet on steady ground.

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The sudden death of a spouse comes as a shock at any age. But it is not entirely uncommon: Nearly 5 per cent of all Canadians were widowed in 2013, according to Statistics Canada. Somewhere amid the grief, new widows and widowers have to navigate their new financial reality. In times like these, it is important to surround yourself with support – including the right person to help you make monetary decisions.

"The first thing we do is ask a lot of questions," says Ms. Black, who also co-authored the book Managing Alone with her mother. "We're gathering a lot of information, getting to know [the client.]" At the end of the day, her financial advice to the recently widowed is the same she would give to any other client: "It's about their goals and what's important to them."

Not all advisers will follow through like that, so it's important to scout out the right fit. One client who came to Ms. Black said her bank asked her only one question: what her risk tolerance was in order to invest life insurance proceeds. The bank didn't bother looking at the client's broader financial situation, which would have revealed she had two dependent children and needed those proceeds to live day-to-day.

"They need someone who can work with them in a calm way – patient, professional," says Douglas Lamb, a financial adviser with HollisWealth Advisory Services Inc. in Toronto who focuses on life-changing circumstances, including the death of a partner. The best adviser should be ready to work with the surviving spouse in whatever way they're comfortable, recognizing their grief, guiding them and giving them as much or as little control as they need – and the confidence, either way, that their finances are in good hands.

The mountain of financial questions that come after a partner's death can, at first, appear insurmountable: How do my taxes change? Am I entitled to benefits? Should I change my investments? Recalculate cash flow? Downsize my home?

But the first step for new widows and widowers, before asking those questions, says Alex Lucas, vice-president of retail product at Manulife Financial Corp., is to get organized. "There's a lot of documentation you need," he says. "It's a good idea to sit down and list all of the accounts and financial institutions that you and your spouse dealt with."

With the whole picture laid on the table, your financial adviser will help you make the best decisions in both the short- and long-term, Mr. Lucas says. (Having all documentation in one spot beforehand will make this much less painful.)

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At that point, you can prioritize financial decisions. "It's best to focus on making sure the basic household budget and finances are running, and you can come back to big stuff" after some time has passed, he says.

Not everyone has that luxury, though. "Some people say, 'Don't make any major decisions for a year,' but sometimes you have to make them now, Mr. Lamb says. "What you have to realize is some decisions have to be made [and can be] done without huge repercussions."

So, while some financial advisers may suggest to put off housing decisions for a year, cash flow dilemmas may demand otherwise: It might not make sense for someone who can no longer afford the house they're in.

Often, the deceased spouse helped or made all the financial decisions for the surviving client. "What people should be looking for is a sounding board," Ms. Black says, to bounce ideas off of and provide guidance. A good adviser, Mr. Lamb says, should "give them the confidence they're making the right decisions."

Every couple should be prepared for the financial uncertainty that can come from one of them dying.

Then, if a death comes unexpectedly, it's still important to work with an adviser who will patiently guide the survivor through the fog. "You sit down, you take stock and you make a plan," Mr. Lamb says. "You have new economic realities."

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Tips for the recently widowed
Financial planner Jennifer Black offer these tips for someone who has recently lost a spouse.

- Keep a bank account with a spouse's name longer than you would think. Sometimes a cheque may come in later and if the bank account has been closed, it can be difficult to cash the cheque.

- Find a "decision partner," someone to use as a sounding board for discussing options and ideas.

- If you haven't already been part of the family's financial dealings, start making a file. As statements are received (bank accounts, investments, RRSPs, insurance, etc.), add to the file and when you are ready, get professional help dealing with them.

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