As we approach Valentine’s Day, it got me thinking about how we show love to those we care about. There are the normal signs of “affection,” from flowers, to chocolates, to dinner out (or maybe even a home cooked romantic dinner!). I’m not going to wax poetic on what you should concoct for your spouse or significant other. What I do want to discuss is ways to really express love for your company and your loved ones. Let me count three ways!
First – A current personal will and Buy-Sell Agreement: Everyone has a will; some have a formal one that has been legally created and vetted with your exact wishes cleanly laid out so that nobody can misunderstand your intentions. The others who don’t have this legal document; their will is presided over by the government. The state will be the judge of how your estate gets transferred and how long it will take. How do you feel about that?
A Buy-Sell Agreement is a business will for the partners of a business. Even in a closely-held family corporation, a Buy-Sell Agreement will detail what happens in the event of one of the four “Ds:” Death, disability, divorce, and disengagement (including retirement).
In both cases, it shows “love” to your heirs and company that you cared enough to leave nothing to doubt on how your estate and company will financially deal with your demise. While not everyone may “love” your final wishes; they won’t have to guess at what you want.
Second – Lifestyle insurance (aka life insurance): Yeah, I know; nobody likes to talk about life insurance. The reality is, that for both loved ones and company, the benefit left to beneficiaries might mean the difference between financial freedom and disaster. My guess is that in the history of life insurance, no beneficiary ever said to an insurance company, “No, that’s way more money than we need. Go ahead and keep it.”
I call life insurance “lifestyle” because when done properly, it assures your loved ones their current lifestyle for the remainder of their lives. In business, life insurance “funds” the Buy-Sell Agreement. In other words, in the event of the death of the CEO or business owner, the company will be able to deal with the financial challenges that come from that without worrying about getting loans or using cash reserves. Now that’s love.
Third – Long-Term Care: This one hits close to home for me as both my parents required long-term care at some level for nearly five years (at the same time). They didn’t have the same opportunities to purchase insurance like we do today.
Here are some facts: First, there is the growing population of elderly. By 2030, it is projected that the number of individuals age 65 and older will be more than 71 million, almost twice the number today. Second, according to the U.S. Department of Health and Human Services, about 70% of individuals over age 65 will require at least some type of long-term care services during their lifetimes. Over 40% will need care in a nursing home for some period.
Of men turning 65 years old, 58% will need some long-term care. Women are more at risk than men once they turn 65 years of age; 79% of women will need some long-term care at some point before death. (U.S. Department of Health and Human Services)
P.S. Men are now living longer than in past generations. We will catch up…
We are living longer than ever before and we have four options to pay for our long-term care, if needed: The government can offer limited assistance, if you make under $10,000 per year; your personal investments and savings (though I’m guessing you might have wanted those for your children and grandchildren); your children’s money, and insurance.
Long-Term Care is starting to become a bigger topic in political campaigns, however my crystal ball never sees it as something that can be funded by taxpayer money. The cost of skilled nursing today is about $120,000 per year. Think about what will happen in 30 years. How will you pay for it if you need it? The money you worked so hard to accumulate over decades? Your children’s money? I encourage you to “show the love” by putting the financial burden of your elder care needs on a faceless insurance company and let your money be for you and the ones you most care about.
Bottom line: Love is expressed in many ways. The normal commercialized forms work great for Valentine’s Day. However, your life and your business loved ones need some love, too. You can show that love by making sure their financial futures and lifestyles are safeguarded. Now that’s a love that will last for generation…
Quote of the Day:
“I have decided to stick with love. Hate is too great a burden to bear.”
~ Martin Luther King Jr.
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