Love is in the air, as Valentine’s Day rolls around again. During the course of your life, you’ve probably sent your share of flowers and candy. But if your valentine is also your spouse — and, in particular, your long-time spouse — you may want to go beyond roses and chocolates this year to give a gift that can help lead to financial security.
You can choose to make financial gifts in a number of ways, of course, and some of them could provide an immediate financial impact. But you may want to look even further down the road and consider what you can do for your spouse in the areas of insurance planning and estate considerations.
For starters, do you have sufficient life insurance to help provide for your spouse and any children who may not yet be adults? Many people rely solely on their employers’ group insurance, which is often insufficient to adequately cover all the costs associated with maintaining their families’ lifestyles — not to mention future costs, such as paying for college. How much life insurance do you need? There’s no one right answer for everyone, so you may wish to consult with your financial advisor.
Life insurance isn’t the only type of protection you need to consider — because you don’t have to die to lose your income. In fact, statistically speaking, you are more likely to become disabled during your working years than you are to die — which is why you need adequate disability income insurance. Your employer may provide disability coverage, but, as was the case with life insurance, it may not be sufficient. So you may also need to consider adding a private policy.
While it’s important to maintain adequate life and disability insurance, it’s still not enough to ensure your spouse will be taken care of if he or she outlives you. You also need to ensure that your estate plans are in order.
Toward that goal, you will need to work with your legal advisor to create the necessary legal documents, such as a will, a living trust, a durable power of attorney or whatever other arrangements may be appropriate for your situation. In generating your estate plan, you must consider many factors: the amount of assets you have, how you want them divided, when you would like them distributed, and so on. In any case, estate planning can be complex, so you will need to work with your legal and tax advisors before putting any strategy into place.
Life insurance, disability income insurance and an estate plan don’t sound like particularly romantic gifts. And you can’t really just “give” them on Valentine’s Day because it will take some time to assemble the insurance coverage and estate planning arrangements you need. But if you haven’t fully worked on these key parts of your financial strategy yet, perhaps Valentine’s Day will be a good time to start — because once you’ve got all your protection needs and estate planning taken care of, you’re really giving your valentine some gifts that are designed to last a lifetime.