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Jewish World Review April 7, 2000 / 2 Nissan, 5760

Bruce Williams

Bruce Williams
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Consumer Reports



How not to blow an inheritance -- DEAR BRUCE: I love my son, my daughter and my son-in-law dearly, and of course, it goes without saying, my grandchildren. But although they earn good salaries, to say that they are irresponsible when it comes to finance is a gross understatement. My daughter and/or the grandchildren will get all of my estate when I pass away, which is worth in excess of $1 million, plus a home that is worth $450,000.

I am confident that if I leave the money entirely to my daughter, it will dissipate in a very short time. That would seem like a formidable task to many, but I am sure she could accomplish this. Is there any way that I can slow this process down? -- W.B., Oxnard, Calif.

DEAR W.B.: The most logical way to control the dissipation of assets, at least for some of the time, is through a trust.

The trustees would allocate a certain amount of money every year for your daughter to spend at her own discretion. Any monies that the trust earns would be taxable.

You could also factor in your grandchildren and perhaps even your great-grandchildren. A good trust attorney would be the person to consult.

DEAR BRUCE: Fifteen months ago my wife and I bought $500,000 house on a valuable piece of lake property. Six months later she lost her job, and our income has been halved. She has a new job, but we are struggling to get by and keep up with the bills.

I want to sell the house and move to something smaller. She says that we have to stay here at least two years to avoid paying capital gains. Since we have already put over $10,000 worth of improvements into the house, I don't think that it has gained in value enough to be sold at a profit.

She says we should retire in this home because the lake property will only go up in value. At 50, I don't want to work another 14 years to pay off a mortgage, leaving no money for emergencies, investments or new vehicles. -- T.R., Richland, Mich.

DEAR T.R.: I am on your side. Your wife loves the house, and that is understandable, and she will do almost anything to keep it. If that "most anything" means getting two jobs to get her income up somewhere where it was before, so be it.

In the absence of that, you are going to be spending the next 14 years struggling, and that is no way to ease into retirement.

DEAR BRUCE: I have been approached by a large competitor to sell my business to them. They want to pay me over 20 years, which makes me a little nervous. Is there such a thing as insurance or a bond that they could supply that will insure that I receive all of the payments? -- B.S., Idaho Falls, Idaho

DEAR B.S.: I know of no way to guarantee the money for that long of a period of time.

Unless the numbers are absolutely huge, assuming your competitor is a public company, tell them you will take a portion of the money in company stock. This somewhat diminishes the value of your business, but the more paper you carry for the longer term, the higher the number that you can receive. However, as you already recognize, if something happens in that period, you could lose whatever is outstanding.

Unless it is a very, very large business, in my view it should be cash up front.

Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).


04/06/00: Get genetic screening for Tay-Sachs
04/05/00: Beating the look-back period
04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
03/27/00: Gambling on business ventures
03/22/00: Old cars as hobby, not investment
03/20/00: Tax on foreign gifts?
03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
03/07/00: Don't expect compensation for ideas
03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
02/23/00: Keeping child's money safe from divorce
02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

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