4 costly financial pitfalls that hit grieving spouses — and the steps to take now to protect yourself later

Losing a spouse can be devastating — but amid that grief, the surviving partner is often left making high-stakes financial decisions at the worst possible time. Income might drop overnight, yet the bills keep coming and major financial decisions need to be made.

To top it off, not all spouses have a solid understanding of their joint finances. One study found that only half of Canadians (52%) say they “share everything” with their partner, including a joint bank account, while 38% only share “important” information (1). Moreover, one in 10 say discussing financial matters depends on the situation or don’t discuss it at all.

From surprise debt to unexpected tax consequences, these financial blind spots can cost survivors tens of thousands of dollars or more. What's worse is making financial decisions in the midst of grief can result in a spouse unknowingly losing benefits, overpaying taxes or even falling victim to poor financial advice.

Many of these pitfalls are preventable if couples openly and regularly communicate about money and make a financial plan for the loss of a partner — as uncomfortable of a conversation that may be.

4 financial pitfalls

A sudden drop in income: Losing a spouse means you might face a sudden drop in income, especially if your partner was the main breadwinner or you were reliant on two incomes. If the surviving partner isn’t as familiar with the household budget, some monthly expenses — like bills, insurance and property taxes — could also come as a bit of a shock.

The survivor could be eligible for the Canada Pension Plan (CPP) Survivor’s Pension, which is based on the deceased’s contributions (2). If the survivor already receives CPP, their pension will be combined with the deceased's CPP into a single monthly payment. But the amount you receive isn’t the sum of two benefits; it will be capped at the maximum retirement pension (which is $1,507.65 a month, as of January 2026) (3).

That’s more than the maximum survivor’s pension, which is $803.54 if you’re younger than 65 or $904.59 if you’re 65 and older (4). But that’s still not much, and non-retired survivors may be left with only one or no income. That means they may not be able to afford the lifestyle they’re accustomed to, as they’re now solely responsible for any debts their name is tied to, like a mortgage.

Unexpected debt: Survivors could also discover that their late spouse had debt they didn’t know about — whether it was simply an oversight or a case of financial infidelity. One in five Canadians keep a secret around money or spending in their relationship, according to a survey from Rates.ca (5). Almost one in five (21%) have hidden cash, 14% have hidden bank accounts and 10% have a secret line of credit or loan.

Debts are typically paid out of the deceased’s estate, though that could impact an expected inheritance. However, you may be responsible if you’re the co-signer on a loan or a joint account holder on a credit card (6).

Inability to access accounts: Even if you’re aware of all accounts owned solely by your late spouse, you may not be able to access them right away. As part of the probate process, a bank could freeze the account upon receiving the death notice, waiting for direction from the executor or administrator — leaving the surviving spouse unable to access those funds until the probate period is up.

Probate is the legal process of validating a deceased person’s will, paying debts and taxes, and transferring assets according to the deceased’s wishes. While probate fees and timelines differ by province, the process takes on average about three months (7). But in some cases it can take much longer, depending on the size of the estate or any legal disputes (such as a contested will) that introduces delays (8).

Higher tax brackets: Survivors can be bumped into a higher tax bracket because they no longer have the ability to split income with their spouse — a strategy that allows a household to lower their tax liability by moving income from a higher earner to a lower earner. For the 2026 tax year, the lowest marginal tax rate is 14% on the first $58,523 (9).

If you’re 65+ and receive RRIF income, you can split that income with your spouse up to 50% (if they have a lower marginal tax rate) to reduce the household tax burden. When one spouse passes away, the full tax burden falls to the survivor (10).

Sponsored

Smart investing starts here

Build your own investment portfolio with CIBC Investor’s Edge online and mobile trading platform. Enjoy low commissions on trades and special pricing for active traders, students and young investors.

Get started today

Steps to take now

While these risks are real, they’re not inevitable. Awareness — not wealth — is the strongest form of protection. And that starts with communication.

Each spouse should know where all important documents are stored (preferably in a fireproof and waterproof safe or in a safety deposit box). That should include all sources of income and assets, including any pensions and RRSPs, as well as insurance information, bank account numbers, credit and debit card names and numbers, and a copy of the most recent income tax return. It should also include information on any debts or loans.

If you add a joint owner to a bank account or investment account — with rights of survivorship, rather than as tenants in common — then you can avoid probate. Most provinces also allow you to designate beneficiaries for your bank accounts (payable on death) and non-retirement investment accounts (transfer on death) (11). RRSPs, TFSAs and life insurance policies also avoid probate, so long as a beneficiary is named.

It can be useful to work with a financial advisor, but both partners should feel comfortable working with that person so there’s already a trusted relationship in place if one spouse passes away.

Perhaps most importantly, it’s crucial to avoid making any major financial decisions in the midst of grief and overwhelm, which could lead to regrets later on. Once some time has passed and the fog begins to clear, you’ll be in a better place to make complex decisions that will impact your future.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Business Wire (1); Government of Canada (2, 3, 4); Cision (5); Investopedia (6); Willful (7); Adler Law (8); Fidelity (9); RBC Wealth Management (10); Canadian Estate Planning (11)