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Jewish World ReviewSept. 1, 1999 /20 Elul, 5759

Bruce Williams

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Econophone

When your company can't pay you


http://www.jewishworldreview.com -- DEAR BRUCE: I work for a company that notified us, rather abruptly, that they didn't have enough money to pay their employees. The rumor is that the owners don't even have enough money to file for bankruptcy. Will we ever be able to get our money? -- S.G., Tucson, Ariz.

DEAR S.G.: If the company is broke and there are no assets, then I think that's the end of the game.

Whether or not they have enough money to file for bankruptcy is almost moot if there is nothing to protect. It may be that they would have some personal liability, depending on the circumstances and the construction of the company. It might be well for all of you who are on the short end of this one to hire one attorney to make appropriate investigations, and of course you should query the wage and hour division of your state government.

DEAR BRUCE: My wife is currently in a 403-B plan with a former nonprofit employer. The plan is doing well, and I would like to leave the money there. Do we have this option, or must we take some action to roll it over? -- M.M., Anchorage, Alaska

DEAR M.M.: It depends upon how the 403-B plan itself has been formulated. In some plans it would be set up so that if someone leaves, the money must be taken out within a prescribed period of time. "Taken out" does not mean putting it in your pocket; it could be rolled over into a traditional IRA without any tax impact. I would inquire with the human resources department of the former employer as to whether she is allowed to leave the money there or if it must be rolled over. If she must roll it over, any decent broker can handle the entire transaction for you, should you wish to consider putting the money into some form of equity or mutual fund.

DEAR BRUCE: Do we need a will if we plan to personally dispose of everything we have and give it to our two children while we are alive? -- R.M., Henderson, Nev.

DEAR R.M.: Why in the world would you do that? Unless you anticipate going into some health facility, where you won't be able to pay and you want to give everything away while you are still healthy, maybe. It just seems that impoverishing oneself is a very dangerous thing to do. You might counter it with your trust for your children. Unforeseen things can happen. Divorces happen, as do liability situations. One of your kids could believe that they have ample insurance and then go out and cause several million dollars in damage and wipe out your assets. Unless there is some compelling reason for you to do what you say, it seems to me that you would be better advised to keep these assets in your name and pass them to the next generation the traditional way -- upon your death.



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).

Up

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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