Few things are more difficult than coping with the loss of a loved one, especially a spouse. While the grieving process varies from person to person, you should take your time to get you and your spouse's affairs in order. One thing to keep in mind during this delicate time is your financial situation. Here are some key things to remember when you lose a loved one to help you retain long-term stability.
1. Consider Any Outstanding Debt Your Spouse May Have Left
You may feel worried if you or your spouse has any outstanding debt. If you and your spouse collectively have more than one loan active, it might be worth consolidating your debt into one loan. Debt Consolidation Plans are long-term and lower-interest solutions which consolidate your loans into one large loan, giving you less to worry about.
Debt Consolidation Loans vs Balance Transfer Loans
Alternatively, if you believe you could pay back any outstanding balances within a year, then you should also consider a balance transfer loan. Balance transfer loans are short-term (12 months) loans that offer interest-free periods. As long as you can pay the loan prior to the free interest period ending, this could be incredibly useful while you are waiting for your spouse's CPF or social security funds to pay into your account. However, if you are unable to pay before the grace period ends, then you may see interest rates increase a substantial amount (26-30%). Once you sort out a plan for the debt, you should transfer any leftover funds into your account and retitle joint accounts to your name to prevent up any legal questions that might arise in the future.
2. Check if Your Spouse's CPF Funds Will Be Transferred Over
Your spouse may have added you as their Central Provident Fund (CPF) primary beneficiary. If so, should they pass away you will receive (via cheque or GIRO) the funds they have put into their account throughout their lifetime. Generally, a nominee can expect to receive the payment 3 to 6 weeks after nominee has submitted the completed application form to withdraw the deceased’s CPF savings. Having access to these funds during this difficult time is a helpful extra flow of cash to you or other nominated recipients, such as your children or parents. However, if you haven't been nominated, you will not be able to check who the nominees are with the CPF board. Because of this, it's important to have a discussion with your spouse regarding who their nominees are beforehand.
What Does a CPF Nomination Cover?
In the event of a CPF Nomination not being done by CPF member prior to their passing, the CPF savings will be distributed by the Public Trustee’s Office (PTO) to the legally entitled beneficiaries (who are usually family members and next-of-kin) under the Intestate Succession Act or the Inheritance Certificate (for Muslims). The PTO charges a fee for the distribution of un-nominated CPF savings. However, since it's a complex process, it's recommended to follow the process outlined on the CPF website and reach out if you have any problems.
3. Redeem Any Life Insurance Policies Your Spouse Took Out
If your spouse has taken out a life insurance policy during their lifetime, you will need to file a death claim to receive the payout after they pass away. Redeeming the claim could be a relief, as you could be eligible for a substantial amount in a lump sum, installments or a retained asset account.
Prior to making the claim, you should consider the processing time, usually around 14-30 days, the documents you must file, and, if applicable, what to do if the life insurance claim was denied. In the unlikely event of a claim denial, you can appeal for free to the Chief Executive of the insurer or the Financial Industry Disputes Resolution Centre. However, the best way to avoid denial is by answering every question accurately and attaching relevant documents.
4. Check Your Eligibility for State-Sponsored Benefits
There are several Singaporean-sponsored benefits you might be eligible for as a widow/widower. For example, you may qualify for reduced pension contributions, according to the Widows’ and Orphans’ Pension Act.
Additionally, the government promotes support groups for those who lost a spouse. People who are widowed and aged 50 or above might want to look into the Wicare Support Group's free grief network. They provide individual and group counselling, talks and workshops, activities, and resources for employment. Additionally, the National Council of Social Service (NCSS) WiShine's Programme and offers counselling and mentoring services for widows.
5. Plan for Your Financial Future
There are several steps you can take to plan for the future. For one, it might be worth considering downsizing your home if necessary. Besides a fresh start, moving to a smaller, more manageable home could help you save maintenance costs to upkeep a larger space. Moving to another neighbourhood could also be beneficial, as you can find a supporting community.
Additionally, you should prepare for anything that could occur in your life by updating your personal files. For example, if your spouse was your beneficiary for your CPF and life insurance policy, now is the time to revise your nominees. You could also cancel any outstanding, subscription-based accounts in your spouse's name to prevent incurring additional charges in the future—or move them to your name should you wish to keep them.
While securing long-term financial stability is not impossible, it may seem a lot more difficult without your partner. When your partner passes, you should quickly apply for their CPF payouts and insurance claims, however, it would be wise to meet with a financial advisor if you've incurred larger debts and need a balance transfer loan or debt consolidation loan. Although this is an incredibly difficult time for you, there are resources available to help you become financially secure in the long-run.