If your spouse managed the majority of the financial responsibilities, even just paying bills can seem overwhelming. But you can work your way through it. It is manageable.

Try not to make any long-term decisions right away. Take your time. Emotional episodes do not make for the best decision-making opportunities.

Paperwork
Gathering the proper paperwork is the first step in settling your spouse's affairs. Start with the following:



Get your finances in order

If you receive a life-insurance benefit, save that money. Put it in an interest-bearing account, but keep it liquid. You may need it.

Make sure you have dental and drug benefits. If your coverage was courtesy of your spouse's company, inquire to see if you're still covered and for how long. If you're not, you might look into private coverage.

Use the paperwork you gathered to claim the following:

Life insurance benefits
Most likely, the company will pay the proceeds directly to the named beneficiary in either a lump sum, fixed payments or as interest payments on a larger amount. It may take several weeks for you to receive payments. If your spouse is named as your beneficiary on your life-insurance policy or retirement plans, you should take this time to name another beneficiary.

CPP survivor benefits
Canada Pension Plan survivor benefits are paid to a deceased contributor's estate, surviving spouse, or common-law partner and dependent children. There are three types of benefits.


Employee benefits
Your spouse may have had life insurance, Group RRSP, vacation or sick pay, or other benefits to which you're entitled. Contact the human-resources director at your spouse's workplace for a list of benefits.

Veterans' benefits
If your spouse served in the military, contact Veterans Affairs Canada. Following December 3, 2003 regulatory amendments, qualified survivors of deceased veterans may be eligible to receive housekeeping and/or grounds maintenance services, for as long as needed, under the Veterans Independence Program (VIP).

Wills

A will is a document that states what will happen to your assets upon your death. It also names the beneficiaries of your property, the guardianship of your children and the executor of your estate. If there is no will, a close relative or even a close friend can apply to the court to be appointed the administrator of the deceased's estate. Once that appointment is made, the administrator will have most of the duties and responsibilities of an executor under a will.

The executor of a will is in charge of gathering the deceased's assets and distributing them according to the terms spelled out in the will. He is also responsible for:


Trusts

With a trust, you can leave your money to a beneficiary and still have control over how the money will be put to use. It lets you designate how and when the beneficiary receives the funds. For instance, you can require that the funds be invested conservatively and that the beneficiary not gain access to the funds until he or she is a specific age. Also, a trust will protect the money from creditors if it provides that funds cannot be taken from the trust to settle a beneficiary's debt.

Living trusts are trusts that are set up and funded while the creator is still alive. When going through the process of settling the estate, the assets in a living trust do not need to go into probate court, saving beneficiaries both time and money. Whereas a will is a public document, a trust is a private document and may therefore be more difficult to challenge.

Living trusts can be either revocable (which means they permit changes until the time of death) or irrevocable (which cannot be changed once set up and are usually established to remove property and its growth from the estate to save estate taxes and to provide for beneficiaries).

Taxes

This is just a brief introduction to some of the tax issues facing you. Taxes can be quite complicated and you should consult a professional tax advisor for more help.

You must file a final income tax return for your deceased spouse. In general, what happens is that your spouse's capital assets -- things like land other than a principal residence, stocks, bonds and the like -- are "deemed" to have been sold at fair market value on the date of death. Any resulting capital gains must be included in the deceased's income for tax purposes for the year of death. Those gains are added to the income (salary, etc.) received by the deceased person prior to her death during the tax year. The amount of tax payable can therefore be quite substantial and the rules for calculating the gains (and any losses) and figuring out the tax are very complicated. That is why you are well advised to obtain professional assistance.

Some smaller details

Review your will and make adjustments to reflect your new situation. You'll probably need to change the name of your beneficiary and you may need to decide on a new executor. Change bank accounts, credit cards, deeds and jointly held property into your name alone.

A new financial picture

Create a budget by writing down your expenses to find out where your money is going. Pull out your credit-card bills and bank statements from past years as guides to your spending habits. Then estimate how much your new bills will be. Be sure to include expenses for entertainment, clothing and other major spending categories. Include some money for savings. It may take several months to fine-tune your budget.

Now estimate your monthly income. Don't include potential income -- only income you are sure to receive. Spousal and child support may be included, but only if you are confident that your spouse will pay them.

Check your budgeted expenses against your income. Do you have more going out than you have coming in? If so, you need to cut expenses. Entertainment bills are easier to trim than fixed costs such as utilities and housing. Keep trimming until you have enough income to cover your expenses. It may hurt at first, but settling into your new financial situation is critical to long-term financial fitness.