Sunday, October 12, 2008

Death Preparedness and Etiquette

Moralea Milne, Feb 6, 2008

It is ironic that at a time when you are most unable to function, when you are beset by grief and afraid for the future, is the time when your faculties are needed the most. When my husband died last March, after a year long bout with lung cancer, I thought we had prepared for his death with a certain amount of foresight. In public we tried to show a rather casual and insouciant attitude to his health, in private however, our inability to give up on the hope of a recovery and the feeling that if we planned too much, we would admit death’s near presence, foiled our attempts to “be prepared”.
Planning for death is not something that can be easily undertaken after you have heard the soul wrenching bad news. It is something that should be started now, before you perceive the need, when your mind is clear, untroubled and unclouded by conflicting emotions. Like Emergency Preparedness, it is something better done well in advance of the time you will need it. Unfortunately, like Emergency Preparedness, we usually put off these plans and arrangements until it is too late.
Sometimes, during the period after my husband’s death, I wondered if he was the first person ever to die. Some agencies and their employees just didn’t know the answers to the simplest questions and some were, in retrospect, plainly incompetent. To be fair, most were gracious, helpful and kind.
Now is the time to discuss wills and charities and executors. Make sure that your estate is going to be an easy transition for your beneficiaries. They will be grieving and having your assets tied up in litigation or probate is not going to help. Your spouse or partner (hereafter referred to as partner only) and your children will need access to cash as soon as possible. Joint accounts, property held in joint tenancy, life insurance policies, RRSP’s with a named beneficiary, all help to make the transition slightly easier for your loved ones.
One very important consideration is PROBATE
What is probate? states that “Letters probate” are simply a judicial certification of the validity of a Will, as well as judicial confirmation of the authority of the person who will administer the Will. Probate fees are essentially a (provincial government) tax on the full gross value of a person’s estate at death.
When I inquired with the provincial government, they informed me that if the estate is worth more than $25,000, there is a probate filing fee of $208.00. Then there are probate fees (like a death duty tax) of $6.00 per thousand on the value of the estate between $25,000-$50,000 and $14.00 per thousand on amounts above $50,000.
The Ministry of the Attorney General, Court Services website states that: “estates may be carried out without a Grant of Probate when all assets (for example, real estate and bank accounts) are jointly held with another person. RRSPs, pensions and insurance policies with a named beneficiary do not form part of the estate and will usually transfer directly to the survivor or named beneficiary. The need for probate is determined by the policy of the agency or financial institution which holds the asset”.
Common lawyer’s fees for this service can be 2% of the value of the estate or 1% if more than $100,000.00

Below is a checklist of matters to consider:

Will-make one and have it properly notarized. This is the document that ensures your wishes are respected. To whom do your assets go, are there charities you would like to support, who will be the guardian of your children, if necessary? Do you have wishes that you would like recognised about your funeral or memorial service, is there someone you would like to have power of attorney if you are incapacitated? Who makes decisions on your healthcare, if you cannot? In my opinion, an investment in a lawyer to help you with your will is a smart investment.
Executor-with a will comes the need for an executor. If your will leaves everything to your partner as sole beneficiary, your partner will be better off as the executor also. This will allow your partner control of your accounts, etc when needed. Even if your estate is more complicated, you might want to consider leaving your partner as executor, it must be somewhat demeaning to go with your hand out to an executor. You will also need an alternate executor in the event you and your spouse are both incapacitated. This could be your most reliable grown child, a friend or a professional. A professional will charge for this service, sometimes quite a lot of money. Being an executor is a big task and responsibility, so make sure whoever you pick is up to the job and agrees to the position. There are some self-help books available on how to be an executor, read them. There seem to be some provisions in the probate process that can be quite onerous to the family-the executor is not supposed to dispose of any assets until after six months. A good reason to consult with a professional to make sure your family is well cared for in a timely manner.
Life Insurance-will you be leaving your family with enough assets to cover the mortgage, pay off the house, support the family, send the kids to university? Maybe life insurance is something to consider to help them cope with the dual loss of a loved one and the extra burden of loss of income. Life insurance benefits are not taxable or part of probate. The life insurance policy should have a named beneficiary (your partner or children) instead of to the estate.
Property- owning property in joint tenancy means the property is not part of probate and it will not be an onerous or expensive process to have it fully transferred to the surviving partner.
RRSP’s-if you name your partner as a beneficiary, the RRSP’s can easily be transferred to the beneficiary and not have to be part of probate.
Bank or Credit Union Accounts: joint accounts are not considered part of probate, consider if you want to change to joint accounts. Make sure you have spoken to your financial institution about their policies regarding the death of a joint account holder. There are different policies with different institutions. I was surprised when I went to my Credit Union of twenty years, after my husband’s death, to find out that I was not considered to be the principal on the joint account, therefore the account was frozen and closed. I had to open another account, show proof of my husband’s death and the will that named me as sole beneficiary and executor. Otherwise “you know who” only knows when I would have had access to my own money. This despite going to the Credit Union months earlier and asking if there was anything to worry about (in regards to a smooth transition). Make sure you speak to someone who understands the institution’s estate policies. Believe me, you do not want to break down in anger and grief in the middle of a crowded Credit Union, although it does help speed the process along!
Pensions-these are not part of the estate, therefore immune from probate. Make your partner’s life easier and let them know what to expect from your employer’s pension plan (if any), in terms of financial recompense, life insurance and medical and dental benefits. Apply for them as soon as possible, it can take awhile (four to eight weeks) before you get your cheque.
Medical/Dental Plans-in the case of provincial government employees, these cease at the end of the month in which the employee dies, you need to reapply (at a cost) to continue the plans. If you have a medical or dental plan, find out what the policies are.
Creditors-some companies will change the billing name without much ado, others will want a death certificate. Some agencies will only accept an original copy, others will accept a certified copy.
Reward Plans-check with your Aeroplan or AirMiles plans, they should have a section for beneficiary. The miles might then be credited to your account, with no penalties. In my case, Aeroplan wants $.01 per point to transfer to my account. On 50,000 miles that is $500.00, quite a huge penalty to pay.
Credit Cards- check to see if your credit card companies pay off the cards on the death of the cardholder.
Car Ownership-if you own the vehicles jointly, then they are not part of probate. One very crazy policy at ICBC is to require that you show them a marriage certificate when you assume full ownership after your partner’s death. Even if you are a co-owner! What happens if you aren’t married I asked? Then you have to have a notarized document. I cannot for the life of me understand why they need to see a marriage certificate when you are already the acknowledged car co-owner, what does marriage have to do with vehicle ownership? Someone needs to re-examine this ridiculous policy at ICBC.
Household Matters-If you and your partner have divided your lives into, “you do this chore and I’ll do that one”, you might want to rethink your strategy. Most of us realize that both partners need to know how to pay bills (and here you thought they paid themselves!), where the bank accounts are, how to find important papers (a little organization there will help!). How about, what kind of finish goes on the countertops, how does this “Rube Goldberg” type of heating system work, how do you make the rasmali you prepared for every one of my birthdays? Maybe it is time to find out which drawer holds the vacuum bags or where to find the hammer and nails!
Passwords-keep the passwords and account identification and names to all the accounts, computer programs, etc in one place that both of you know about.

Funeral Homes-they’re good at handling distraught clients, but do you really need that $10,000+ funeral? A simple cremation is approximately $1350.00, you provide the urn and your own memorial service. That price should also include at least one or two original death certificates and a good half dozen certified copies. That was my choice but I had a lot of family, friends and community support to help with the details. It is not for everyone however. Some funeral homes will accept monthly payments, some don’t. The one I used was gracious and reasonable. They will usually supply you with the Canadian Pension and Death Benefit forms plus a checklist of things to remember.
Funeral- there are ways to plan for a funeral without using a funeral home, stay tuned for another article on this subject.
Executor-if you are the executor, there are some excellent self-help books available, use them or contact a professional, you don’t want to add troubles with Revenue Canada or the province to your grief.
If you or your partner have contributed to Canada Pension Plan for a certain duration, the following will apply:
Death Benefit-Canada Pension will send you $2500.00 towards funeral costs if you apply within sixty days of the death. It took about two months to arrive.
Survivor’s Benefit- Canada Pension will pay a certain amount to the surviving spouse or common-law partner. This is not enough to survive on……but every bit helps.
Children’s Benefit-Canada Pension will pay a monthly allowance to a dependant child under age 18, or, age 18-25 and in full time attendance at a school or university.

One of the things I have learned is that death is not a private affair, it is a public one. Whether it is death from a long illness or a sudden and utterly unexpected death, friends and loved ones want to visit and hold onto their relationship with your partner or loved one and to support you and your family through the initial stages of your heartache. Be gracious but say no if you need some time alone. Accept help when it is offered, your life will be so full of grief there are not many resources left for day to day chores. To those that offer help, just do it. Don’t just ask, “what can I do?”, most people are reluctant to accept or name the help they might need. No-one is going to ask for a freezer stocked with easy to heat meals, but that can be a big help (make sure about dietary concerns first). My sister just recently lost her husband to a tragic accident and 80% of the food that was brought to her house was either lasagna or banana bread. The roast pork and fruit salad someone brought over were a welcome change! Offer to prepare the hall for the memorial service or to aid in the clean-up. How about chopping the wood, bringing containers of kindling, going for a walk in the woods, taking the kids out, giving a hand with the paperwork-if you have the skills? Look around and you can see where you can be of assistance.
The grieving family appreciates the help and support but they also need some private space in which to grieve. Keep your visits short, unless asked to stay, fifteen minutes to half an hour is enough. Don’t be offended if calls and e-mails are not returned, sometimes they require just too much effort. Don’t expect that the family will remember much from around the time of death, I don’t. I only know that my generous and caring family and community took care of the many details that had to be attended to. Thanks.

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