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My physician spouse has died. What do I need to do?

Older woman drinking coffee while looking out the window

Whether it follows an illness or occurs unexpectedly, the death of a spouse is overwhelming, and you may never be fully prepared for it. If your spouse was a physician, it can be even more complex for you.

Here are some tasks you’ll need to look after and issues you may need to consider.  

What should I do first?

Here are the most pressing things to take care of right after your spouse’s death:

  • notify family, friends and colleagues
  • make appropriate final arrangements (following any special instructions regarding burial, disposition of the deceased’s body or organ donation)
  • locate the will, if there is one
  • if your spouse was practising medicine at the time of death:
    • find out whether a succession plan for the practice is in place and, if so, notify the successor of the death
    • ensure patient medical records are secure
    • contact your spouse’s regulatory body (i.e., their provincial/territorial college of physicians) and find out what you need to do

What if my spouse didn’t have a will?

Generally, a will names an executor1 of the estate. This person can step in right after death to manage the estate and its assets. But if your spouse didn’t have a valid will (this is known as dying “intestate”), you or another family member will need to apply to court to be named the estate trustee or administrator.

Further, without a will, there’s the question of how your spouse’s assets will be divided. If your spouse died intestate, their assets will be distributed according to a provincially legislated formula. However, assets that have valid beneficiary designations — e.g., RRSPs or life insurance policies — are different, and typically go directly to that beneficiary. Similarly, assets that are owned jointly with rights of survivorship typically go directly to the joint owner.

Each province has its own laws with respect to what happens when a person dies intestate, and you may need further advice to sort out exactly what needs to happen.

What do I need to do as an executor or administrator?

Whether you are appointed as the estate administrator by a court or named executor in your spouse’s will, it’s important to understand what your job entails.

The list of administrative and financial tasks for an executor is long: a simple estate settlement could take some 250 hours of direct involvement, while a more complex estate could take more than 400 hours, typically over the course of at least a year. See our checklist of executor duties.

MD Private Trust Company (MDPT) can help with the administrative and financial tasks that need to be looked after. More on that below.

What do I need to do about my spouse's medical practice?

If your spouse had an active medical practice, it will need to be wound down as a separate, but related, matter to settling their estate. Winding down a medical practice can include:

  • dealing with employees of the practice
  • notifying patients and transferring their care to a successor physician
  • properly storing patient medical files and transferring them as required
  • safeguarding all important documents
  • locating, securing and appraising all assets
  • dealing with the office premises (lease/landlord or sale if owned, moving out, etc.)
  • collecting any income owing and paying all debts
  • making tax elections and filing tax returns (personal, business and estate)

What if my spouse had a medical professional corporation?

When your spouse dies, their corporation continues to exist. All corporations have one or more voting shareholders who appoint one or more directors to supervise the activities of the corporation and to make decisions about those activities.

If your spouse was the only voting shareholder and director of the corporation, it’s the executor who controls those shares now.

The executor will need to:

  • appoint a new director for the corporation
  • with that director, make decisions about the corporation:
    • have the shares valued
    • evaluate the corporation’s assets and the estate plan
    • decide whether to maintain the corporation or wind it up
  • If the decision is made to wind up the corporation, with the director:
    • implement appropriate tax strategies
    • ensure that the corporate proceeds are distributed to shareholders

What if I’m the executor but feel I can’t handle it? How can MD Private Trust Company help me?

Losing a spouse is unspeakably hard. You may not feel up to dealing with their estate on your own. Further, if you and your spouse had a blended family, had separate and significant assets or liabilities, was part of a group practice, or owned commercial real estate or foreign assets, their estate may be complex and you may be overwhelmed by what needs to get done.

One option is to work with a professional estate and trustee team. MD Private Trust Company (MDPT) can act in a range of ways: as executor, as a co-executor, or as an agent for an executor.

If you choose to work with them, MDPT can, among other things:

  • help you manage your spouse’s investments and other assets until they are distributed
  • wind up their practice
  • wind up their medical professional corporation
  • file their final tax return and the corporation’s tax return
  • make sure the estate assets are distributed correctly (i.e., according to the will or intestacy laws)

What else do I need to think about?

The changes in your personal and financial life brought on by the death of a spouse are significant, and it’s important for you to take the time to understand your new situation and the implications of any decisions you make. You will want to consider the following:

Your new financial picture

  • Immediate cash flow:  What’s the impact of your spouse’s death on your household income? Do you need to draw up a new, tighter budget?
  • Long-term spending: Will your long-term plans also change in order to spend less (e.g., travel less, move to a different home)?
  • Asset allocation: You’ll want to reassess your investment objectives and tolerance for risk. If you decide to work with MDPT, they can ensure all assets you inherit reflect your personal investor profile.

Your own estate plan

  • Your will: You’ll probably need to make changes to your will, as well as to your beneficiary designations on your RRSPs, life insurance policies, etc.
  • Powers of attorney for personal care and property2: Who did you name in your power of attorney to make decisions for you if you’re unable to do so yourself? Was it your spouse? If so, you’ll need to appoint someone else to this role.
  • At MD, the cornerstone of our relationship is preparing and maintaining a proper and current financial plan, which includes your overall financial management as well as your plans for retirement income and your estate plans.

MD Advisors* support their clients with impartial, plan-based financial solutions through their life journey. Financial planning advice can help you plan for changed circumstances. At MD, we work with family members of physicians, even if the physician is no longer a client of MD. We are here to help.

*MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.

1 An “executor” is called a “liquidator” in the province of Quebec and an “estate trustee” in the province of Ontario.

2 In Canada, a power of attorney can be called a “continuing power of attorney,” “enduring power of attorney” or “protection mandate,” depending on the jurisdiction and the terms contained in the document. A power of attorney for personal care can be called a “representation agreement,” “personal directive,” “enduring power of attorney appointing a personal attorney,” “health care directive,” “advance health care directive” or “protection mandate,” depending on the jurisdiction.

The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.

 

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