3 Non-Romantic but Vital Things to Do on Valentine's Day
February 14, 2013 by Liz Davidson
With Valentine’s Day approaching, many of us are looking forward to flowers, chocolates, and candlelit dinners. But if you really love the significant other in your life, here are some vital but not-so-romantic things to do on Valentine’s Day:
Make sure you have enough life insurance.
If the worst were to happen to you, what would be the financial impact on your loved ones? According to a recent study, about half of US households admitted needing more life insurance and about 30% didn’t have any at all. You may have some life insurance through your employer but this is typically equal to just one year’s salary when people often need coverage equal to 6-10 times their salary.
You can use this calculator to see how much life insurance you may need. If you’re in good health, you can shop for low cost term insurance policies on sites like term4sale.com and insure.com to cover the period you need it. You don’t need permanent insurance if your dependents will all be independent in 20 years (hopefully). On the other hand, if you’re in poor health, you may be better off purchasing additional group life insurance through your employer if possible at open enrollment. The main drawback of this is that you may not be able to take it with you when you leave your job.
Check your beneficiary designations.
Remember that form you filled out quickly when you opened your IRA at the bank? Well, it trumps your will or any other estate planning documents you may have no matter how little time or thought you put into it. You’ll want to check any existing life insurance policies along with retirement accounts and annuities to make sure that your beneficiaries are up-to-date. This is especially true if you had a previous spouse that may be listed. If so, they may inherit the money regardless of whether you divorced and re-married. You also might want to add any children or grandchildren that were born after you first completed the beneficiary form.
Depending on your state, you may also be able to add beneficiary designations to other assets like your bank and brokerage accounts (payable-on-death or POD and transfer-on-death or TOD, respectively), your home (transfer-on-death deed), and even your car (transfer-on-death registration). The advantage of this is that your loved one(s) can access these assets without going through the time and cost of probate. They usually just have to present a birth certificate and some form of government ID.
Draft necessary estate planning documents.
For any assets that don’t have a beneficiary, you can use a will to decide who gets what. (If you pass away without a will, you can see how your state would divvy up your assets here.) The problem is that a will has to go through the probate process, which is public and can be lengthy and expensive, especially if you have properties in multiple states.
You can get around all this with a trust. Trusts are private and don’t generally go through probate. The downside is that trusts need to be drawn up by an attorney and can be expensive. That cost can still be considerably less than the probate fees though.
Estate planning isn’t just for when you pass away. Remember the Terri Schiavo incident and how devastating that was for her family? A health care directive is designed to avoid such conflicts about medical decisions. It has two parts. One is a living will that specifies what you’re loved one would like done for them if they’re not able to make medical decisions. The second is a health care power-of-attorney that allows them to designate someone to make those decisions.
A durable power-of-attorney does for financial decisions what the the health care power-of-attorney does for medical decisions. It allows someone to manage your finances while you are unable to. After all, the last thing you want is to emerge from the hospital only to find that your bills haven’t been paid and your credit is more damaged than you are.
Finally, if you’re the one in the relationship that tends to handle all the legal and financial matters, it’s important that your significant other be able to find your accounts and legal documents. After all, they won’t do much good if no one knows where they are or if they even exist. For health care documents and medical records, you might want to consider a service like docubank, which makes this information easily and quickly accessible to hospital staff. One of our planners also uses mint.com primarily for the value of having all his family’s financial accounts on one site for his wife in case something were to happen to him.
None of this is remotely romantic or even pleasant to think about. But these steps will ensure that your loved ones are taken care of with minimal cost and hassle in case something happens to you and that you can take care of them and their finances if they are unable to. That sounds like real love to me.
