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Your Health

January 11, 2023

Financial Well-Being: Coping With Debt After Death

By Jennifer G. McKechnie, MSW, RSW, Psychotherapist

The days, weeks, and months after losing a spouse can be some of the most difficult that we face. We are left to cope with our own grief, while in some cases supporting mourning children or other dependents. But despite this immense grief that we carry, time marches on – and with it, the pressure to manage household responsibilities, stick to a budget, and pay off debt.

For some, managing finances may be completely new, as this may have been the role of their late partner. For others, the challenge may be the loss of income. Either way, getting our finances in order becomes an urgent task, as life goes on and new bills continue to come in.

If the partner who passed away purchased life insurance, their spouse may not have to rely solely on a single income to cover the cost of living. But without life insurance, the individual may be in a situation of having to grieve, while trying to manage financial obligations (e.g., mortgage payments), and possibly facing new debt (e.g., their late spouse’s credit card bill, post-secondary loans, taxes, etc.).

This may mean needing to reassess lifestyle choices, and may even require downsizing as a way of mitigating expenses on a fraction of their previous household income.

During this highly stressful and overwhelming time, it is important to remember that financial well-being can be critical to your path to mental wellness. Having a plan in place is a good first step to coping with this difficult situation. These five steps are a good place to start:

  1. Review your loved one’s will (if they have one). It can provide direction on how your partner wants any assets to be dealt with and can be extremely helpful when working with financial institutions, employers, and insurance companies to settle estates.
  2. Keep important financial documents in a safe place. Getting organized can help minimize the unwanted stress of sorting through paper piles and computer files. Further to this, you will likely require much of this information when it comes to filing final taxes for your loved one. Having it easily accessible can make this stressful time run a lot more smoothly.
  3. Contact your spouse’s employer. There may be money coming your way through a pension plan, group life insurance, or otherwise, which could help reduce some of the stress around paying bills and managing debts. Additionally, the employer may have information that you will require when it comes to filing your loved one’s taxes at tax time.
  4. Reach out to your financial institution(s) to let them know about your partner’s passing. They may be able to assist with delaying certain payments, and they may have information about any insurance coverage that your loved one had in relation to debt (mortgage insurance or credit card insurance are two examples).
  5. Make sure to write down the names of the individuals you talk to, as it is normal to struggle with memory and focus during periods of high stress. If needed, ask a person you trust to attend financial or legal appointments with you as a means of helping to support your memory by taking notes and making sure your questions get asked.

Making plans in advance of any crisis situation can help to alleviate extra stress during the event. Generally, many of us prefer to avoid talking about things like death or losing a loved one, but it is something that will likely affect us at some point. Take time to sit with close family members to discuss finances and plans. Involving a professional in the area of finance and insurance may also be helpful.

Editor’s Note: While nobody wants to think of a loved one dying too soon, purchasing life insurance for both yourself and your partner can minimize the financial stress that too often accompanies the death of a spouse. For more information, speak with a Serenia Life advisor. Fill out this form to get started.



Jennifer G. McKechnie is a trauma therapist working with both children and adults. Jennifer utilizes interventions such as Eye Movement Desensitization and Reprocessing (EMDR), Sensorimotor Psychotherapy, as well as Polyvagal Theory in her work. She values ongoing learning as a key part of maintaining and growing her practice. When away from the office, Jennifer incorporates self-regulation techniques into her day by connecting with nature through running, as well as spending time with her partner and pets.

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