Any Valentine’s Day gift is thoughtful. Still, many presents have fairly short shelf lives — flowers fade, chocolates get eaten and those little candy hearts that say “Be Mine” get stale. This year, why not give your special valentine a gift that keeps on giving for years to come?
Specifically, consider making a financial gift. Here are a few possibilities:
• Give stocks. You might want to give shares of stock in a company that makes products favored by your loved one. As an alternative to buying stocks, you could give your own shares. You’ll need to know what you originally paid for the stock (its tax basis), how long you’ve held it and its fair market value at the date of the gift.
• Contribute to an IRA. The IRA contribution limit for 2008 is $5,000. Investors who are age 50 and older can also make a “catch-up” contribution of an additional $1,000. So if your valentine hasn’t fully funded his or her IRA for this year, you can help. (You can’t contribute directly to another’s IRA, but you can give cash gifts to be used for the purpose of funding an IRA.) Because of their tax advantages, IRAs are great retirement savings vehicles. Traditional IRAs have the potential to grow tax deferred; Roth IRAs potentially grow tax free, provided the investor has had the account for at least five years and is 59-1/2 or older.
• Make a charitable gift in your valentine’s name. Your loved one, like most people, probably supports a variety of social and charitable organizations. By making a donation to one of these groups in your valentine’s name, you can add special meaning to this Valentine’s Day.
• Review your estate plans. It doesn’t sound all that romantic — but if your sweetheart is also your spouse, you’ll certainly be looking out for his or her best interests when you review your estate plans. If you were to die without a will, for example, you would cause considerable anguish to your survivors. And in many cases a simple will isn’t enough — you may need to establish a living trust or other estate-planning tool. You’ll also want to go through your financial assets —including your IRA, 401(k), annuities and life insurance contracts — to make sure your beneficiary designations are still accurate.
By making any of these gifts, you’ll show your loved one that you really care — and the results of your generosity will be felt long after Valentine’s Day is over.