LOSING a spouse is one of life’s most traumatic experiences, but failure to think about the financial consequences in advance can lead to 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, “especially if you have to lodge probate, which is when 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. Cowell Clarke partner Natalie Abela said this took place after the survivor lodged an Application to Note Death with the Lands Title Office, with a copy of the death certificate.

“Joint tenancy is the most common form of property ownership between spouses, and means the deceased’s share in the property is not included in their estate,” she 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 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.

Some funds demand a final death certificate rather than an interim death certificate and this can take more than six months.

“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 presented to the bank but cash in 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 and things you subscribe to?” he said. “Sometimes to get a simple change can be nightmare.

“Your digital life is an issue that a lot of people don’t consider.”