Fi­nan­cial valen­tines

The Covington News - - Business -

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.

Joe Stier

In­vest­ment Rep­re­sen­ta­tive

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