A True Labor of Love: 4 Financial Focused Valentine’s Day Gifts

As Valentine’s Day approaches, retailers bombard us with ads for chocolate, jewelry, tee-shirts or mugs with sentimental sayings to represent our love and devotion to those closest to us.  While it’s hard to compete with those items, I’d like to propose another option for showing how much you care for your loved ones: the gift of financial harmony. This means having current, organized and well-communicated wealth plans and structures in place.

It may not have the romantic flair of a dozen roses but it is a true gift of love – one that is thoughtful, handmade and requires your time and devotion to pull together.

What are the components of this gift?
  1. An updated estate plan. Given recent changes in the tax laws, if you have not reviewed your estate planning with your attorney and/or accountant now is the time to do so. You want to be sure it reflects your current wishes and includes a letter of intent that tells your loved ones your hopes in passing on assets to them and the reasons behind your decision making. This process should include designating powers of attorney for health and finance and notifying your family as to who those people are.
  2. Updated directives for health and later life decisions. In addition to or within your estate planning review, be sure you have a living will that outlines your health directives and then share this information with your family, physician and attorney. Ideally, this document should be less than five years old as healthcare professionals may be hesitant to act on the directives in an older document.
  3. A centralized inventory of your financial data. This should include a full listing of the accounts, entities and liabilities that make up your financial wealth along with a listing of the professional advisers you work with, locations of critical financial and legal documents and instructions for accessing your passwords. This inventory will prove tremendously valuable to your family members and any professionals involved with your estate should something happen to you unexpectedly.
  4. A designated meeting time to communicate your plans. If you are married, talk as a couple first, then with each beneficiary to set expectations about any asset transfer plans and your hopes for how these gifts will impact their life. These conversations enable your loved ones to appropriately plan for their own finances knowing information such as, how much financial help will be provided for the education of younger family members, if funds will be available for someone wishing to start a business or make a career change, the extent to which your beneficiaries should be saving for their own retirement.

You may have different variations of this gift for different recipients. For example, there may be some loved ones who you talk with about your values and help them to set expectations without providing total wealth numbers. Particularly in delicate family situations involving health or addiction issues the levels and access to information may need to vary.

Completing these tasks requires more work than calling a florist or visiting a jeweler but there is help available for getting it all done. We have recommended since the passing of the new tax bill that all clients touch base with their accountant and/or attorney to make sure their estate planning and wealth structures are up to date and still reflect their wishes (click here for a summary chart of key tax changes and implications). Within that process, you can also review or create a living will. As to organizing financial data, you can find a format example here to serve as a guide in defining the different categories and types of information to include. Finally, to determine the best way to initiate and plan for effective conversations with adult children on wealth transfer and inheritance, we invite you to reach out to us for sample meeting agendas as well as one on one consultation to meet your family’s needs.

There is no better gift to those you love than ensuring your financial structures and planning are current, coordinated and understood. It is a gift that demonstrates trust and enables more informed (even life-changing) financial decision making on the part of the recipient. This is a gift that can be given at any time of the year and if you choose to also include a box of chocolates, all the better!

The material shown is for informational purposes only and should not be construed as accounting, legal, or tax advice.  Altair Advisers LLC is a registered investment adviser with the Securities and Exchange Commission; registration does not imply a certain level of skill or training.  While efforts are made to ensure information contained herein is accurate, Altair Advisers cannot guarantee the accuracy of all such information presented.