How spouse’s death affects your money

Too few couples think about the consequences a death will have on their finances. ANTHONY KEANE looks at what to do in advance

LOSING a spouse is one of life’s most traumatic experiences, but failure to think about the financial consequences in advance can add extra unnecessary stress.

Property, superannuation, pensions and even each partner’s digital footprint should be discussed by couples, no matter how uncomfortable the conversation, according to legal and money specialists.

NDA Law managing director Andrea Michaels said there could be financial delays of several months after a partner died before the court approves the will.

Death certificates, required to change names of assets such as joint shares and bank accounts, may take three or four weeks to finalise. PENSIONS A majority of retirees are receiving full pensions or part pensions. When one partner dies the partner must contact Centrelink quickly.

A full single pension is just two-thirds the size of a combined pension for couples, and assets and income test thresholds for singles are also lower, so death often causes a financial crunch.

“Your expenses usually don’t drop that much – your rent or mortgage won’t drop if one of you is gone,” Ms Michaels said. REAL ESTATE Most couples are joint tenants in property ownership, which means the surviving partner becomes the sole owner. But Cowell Clarke partner Natalie Abela said if property is held by a couple as tenants in common, it forms part of their estate and is dealt with by their will.

“As with any asset that falls into the estate of a deceased, it is at risk of an inheritance claim by beneficiaries or potential beneficiaries,” Ms Abela said. SUPERANNUATION Super payouts do not automatically form part of a person’s estate and the fund’s trustee decides where the money goes. It can sometimes take many months to get your partner’s super, and each super fund has different rules.

“The distribution of the superannuation will also depend on whether a binding death benefit nomination has been made and is valid, or if the benefit is to be paid to the estate,” Ms Abela said. OTHER ASSETS Cash in joint bank accounts goes to the surviving spouse once a death certificate is given to the bank, but cash in a deceased partner’s account forms part of their estate in their will. It’s a similar process for shares and other assets. YOUR DIGITAL LIFE Novo Wealth financial adviser Paul Garner said with many couples, one partner looked after the finances, and if they died “the person left is just floundering”.

Mr Garner said couples should talk about their digital life. “Do you have copies of passwords?” he said. “Sometimes to get a simple change can be a nightmare.”