One of the most difficult of life’s passages to navigate is that of moving from being one in a couple to being alone. Whether through widowhood or divorce, thousands of Canadians find themselves taking over the reigns of their lives each year, directing their own futures as the suddenly single.
One moment things are as they should be. The next, everything has been thrown into chaos. And just at a time when we are least able to think straight, we’re forced to make dozens of decisions, consider hundreds of possibilities, and uncover important facts, many of which are not at all intuitive.
Facing the reality of less money? Look hard for ways to cut expenses. If you think you may be faced with shortages in your cash flow, consider applying for overdraft protection as a short-term way of avoiding non-sufficient funds (NSF) cheques. The last thing you need is to ruin your credit history. But don’t turn that overdraft into part of your cash flow planning or you’ll never get out of the hole.
Inherited assets through a will or as part of a separation agreement? Time to figure out how to get that money invested in the right way for you. Take your time. Don’t let anyone talk you into doing anything too quickly. And if you don’t understand what you’re being offered, the answer is always, “No thank you.” You should be able to explain whatever you’re buying to a twelve-year-old. If you can’t, you don’t understand it well enough to be buying it.
If your partner had RRSPs or RRIFs, the assets can be transferred to you without tax consequence through your partner’s beneficiary designation, will or through a divorce settlement. You won’t have to pay any tax on the money, provided you roll the funds directly to your own registered plan. You may also be entitled to a lump sum from your buddy’s corporate pension plan, which can be transferred tax-free to your RRSP.
Book an appointment with your lawyer. It’s time to change your will, powers of attorney and any other documents in which your spouse was named. Remember to change the beneficiary designations on your own insurance, RRSPs, RRIFs, or anything else on which your partner was your beneficiary. And if you have young children and haven’t yet named a guardian for them, the appointment of one is now a must.
Tackling the details can be difficult when all you really want to do is hide from your sorrow. Let your friends and family help. And don’t be too hard on yourself during this emotionally ripe time. Trust the people you know and accept all the help you’re offered. Get a notebook and take copious notes. And go slow. There’s no rush to get to where you need to be next. Time heals. It also helps you make better decisions.