Nicola Wealth Management

Nicola Wealth Management

March 16, 2015 11:30 ET

Getting Widows on the Right Financial Track After Losing a Spouse

VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 16, 2015) - Widowhood is a devastating event that occurs to more than one million1 women each year in Canada. The number has been steadily increasing for the last decade due to boomer demographic shifts--with women outliving men by about four years, and even longer if they are younger than their husbands.

"That means there are many years ahead to be responsible for financial decisions," said David Chalmers, a financial advisor at Nicola Wealth Management. "The death of a spouse unleashes a deluge of financial tasks for the surviving spouse that can be particularly daunting, even in cases where the survivor has been actively involved in financial matters before becoming a widow.

"It's especially challenging for widows who aren't as familiar with investing, insurance policies, taxes or estate planning because their husband handled most of these financial matters."

How can widows get on the right financial track after losing a spouse? Nicola Wealth Management offers five suggestions:

1. Plan for a contingency that a spouse will pass away. Ideally both spouses are involved in planning of potential widowhood long before it happens. A qualified financial advisor will be able to review the estate and finalize a plan with you. A plan might include: a detailed income and estate projections, the use of trusts (intervivos and testamentary), the use of corporate structures, life insurance, identifying potential survivor issues, appropriate beneficiary designations, tax liabilities analysis at death, and strategies to maximize tax efficiency.

"We often review our clients' wills, Powers of Attorney, representation agreements and business agreements to see if there is a gap in the planning and offer helpful suggestions," said Chalmers. "With business owners, for example, we often point out tax saving strategies."

2. Don't make major money decisions right away. When you are in the midst of grief and mourning, it's extremely difficult to make big decisions. Save them for later when you've had a chance to digest the situation and you can make decisions more clearly about your new life ahead. In the interim, keep cash available for near-term needs. Some near-term next steps might include: reviewing your cash flow, ensuring bills are paid, claiming government benefits and maintaining enough cash liquidity.

3. Make moving decisions carefully. Although it might be tempting to move in with an adult son or daughter across the country to ease your loneliness, don't leave your home and community right away. Your major support network, social circles and medical providers are nearby.

4. Don't be at ATM machine for others. Widows sometimes fall prey to family, friends and acquaintances that approach them for money after a tragedy when they are more emotionally vulnerable.

"I tell my clients not to succumb to these requests right away and suggest they seek advice from professional advisors who have their best interests in mind," said Chalmers. "As a financial advisor, I share with them what they can and cannot afford to do. On a few occasions, I have taken on the role of being 'the bad guy' who tells a family member to back off and stop."

5. Once your spouse's estate has been settled, ensure your finances reflect your new life situation. It is important that your investment portfolio is positioned to reflect your new financial position and your comfort level. This means reviewing your new budget, focusing on cash flow. You'll also want to re-state the beneficiary designations for your RRSP or RRIF, your TFSA, life insurance policies, entitlements under a group benefit plan. In addition, your Will, Power of Attorney and Representation Agreement (or Advanced Directive) may need to be re-drawn. At this point, you may now want to re-think where you want to live. If you live in a house, perhaps you might consider moving to a condo or re-locate near your children and grandchildren.

Contrary to U.S. studies2 that show 70% of widows leave their financial advisors, Nicola Wealth Management has a 90% client retention rate.

"My clients who have become widows or widowers would not consider the death of their partner as a time to change advisors," explained Chalmers. "If anything, they are drawn closer as they know there's someone to trust.

"The key is to find a qualified financial advisor today to help you plan ahead; someone who not only has experience with estate planning and disbursement, but also shows that they care more about you as a person than your assets."

About Nicola Wealth Management

Established in 1994, Nicola Wealth Management (www.nicolawealth.com) is one of Canada's fastest growing asset fund management and private investment counsel firms (Investor Economics, 2011) with over $3.5-billion in assets under management. The firm provides wealth accumulation, retirement and legacy planning services and expertise to high net worth individuals, institutions, and foundations across Canada. NWM's team of experienced advisors and support staff offer one of the best advisor-to-client ratios in the industry.


1 In 2014, Statistics Canada reported that there were four times the number of widows compared to widowers, with 1,385,874 women and 348,740 men surviving their spouse. Approx one in every three to four women aged over 65 live alone and by 80 years of age, more than half of women live alone compared to about 25% of men.

2 Boston Group study is the most widely published and referenced

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