HOW CAN I GET TOP DOLLAR FOR MY BRITISH GOLD COINS?
By Writer: Bruce Hager Reporter associate: Jacqueline Smith

(MONEY Magazine) – LIVING TRUSTS Q. To avoid probate, I have set up living trusts for many of my assets. Can I also set up a living trust for the CDs in my Individual Retirement Account? Abraham Goldberg Stamford, Conn.

A. Your IRA is already a trust and is treated as a nonprobatable asset as long as the beneficiary is not your estate. You need only name some person -- or one of your existing living trusts -- as beneficiary to keep the account out of probate.

COINS Q. I have a complete set of British sovereigns dating from 1893 to 1932. What are they worth today, and where might I find the best price? Wilbur Jones Athens, Ga.

A. Sovereigns, gold coins with a bullion content of 0.2354 ounce and a face value of 20 shillings, were produced throughout the British empire until 1932 and are still minted in Britain. The coins are so plentiful that most are worth little more than their bullion value (about $115 in early December). But some rare sovereigns are quite valuable if they are in good condition. For example, a coin minted in London in 1917, when production was limited by World World I, could fetch up to $7,200, according to James Morton, a British coin specialist at Sotheby's in London. For a free list of U.S. coin dealers who might appraise and bid on your coins, write to the Professional Numismatists Guild, P.O. Box 430, Van Nuys, Calif. 91408. To sell the coins for their bullion value, use a reputable gold dealer such as MTB Banking Corp. (formerly Manfra Tordella & Brookes), 30 Rockefeller Plaza, New York, N.Y. 10112. For more about gold coins, see Collectibles on page 27.

TAXES Q. We refinanced our mortgage by taking out a new one that included additional money for home improvements. Can we deduct both the $1,900 penalty for prepaying the old loan and the $2,100 closing costs for the new one on our 1987 tax return? Brad Casper Cincinnati

A. No. You can deduct the entire prepayment penalty. But the tax code permits you to deduct immediately just the fraction of the points -- paid as part of the closing costs -- that corresponds to the portion of the new mortgage spent on home improvements. The rest of the points may be deducted only if amortized over the life of the loan. If you sell the house before paying off the mortgage, you can deduct whatever remains in one lump sum.

RETIREMENT FUNDS Q. Now that I'm retired, I must make my $100,000 nest egg last. If inflation stays at 5%, and the money earns 15% a year, for how long can I continue to withdraw $1,000 a month? Franklin Smith Naugatuck, Conn.

A. Your money would run out in 19 years and seven months if the earnings compound monthly. To make sure your money survives as long as you do, determine your life expectancy from an actuarial table (you can get one by sending $1.50 to Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, and asking for ''Vital Statistics of the United States, 1985 Life Tables,'' stock No. SN01702201027-5). Then divide your nest egg by your life expectancy to find out how much you can safely withdraw this year. In every subsequent year, recompute your life expectancy -- and also your withdrawal. Your income will decline slightly each year, but you will never outlive your capital.

MONEY-MARKET FUNDS Q. After the October crash, I invested most of my money in money-market funds. As a retiree hoping to preserve capital, I want to know whether the 7% yields advertised by some of the funds are safe. George D. Merrill Nevada City, Calif.

A. Your principal will probably be secure, but the yields will change with interest rates. For safety ratings of the 150 largest money funds, send for a free two-month trial subscription to Income & Safety (3471 N. Federal Hwy., Fort Lauderdale, Fla. 33306; $49 a year). And for more about money funds, see Fund Watch on page 43.

INVESTING Q. I recently tried to sell stock that I've held for 12 years, only to be told by my broker that the transfer agent put a stop order on the sale because the certificate had been reported missing. What should I do? Irvin Suisman Marlton, N.J.

A. First ask the company whose shares you tried to sell for the name of its transfer agent -- the commercial bank or other institution that keeps records % of the corporation's stock- and bondholders. Then write to the transfer agent for copies of any documents that were filed to obtain a replacement certificate; these should show who reported the certificate missing and who received the replacement. If a mistake was made, you or your broker can ask the transfer agent to revalidate and return your certificate. The agent must respond in 30 days. If you still are not satisfied, take the matter to the Securities and Exchange Commission, Office of Consumer Affairs, 450 Fifth St. N.W., Washington, D.C. 20549.

PENSION Q. My company terminated its pension plan and went out of business. I was told that because my distribution exceeded $3,500, I would have to receive it in an annuity of the firm's choosing. Is this true? Terry Swim Arlington, Texas

A. Yes. The law allows a plan sponsor to require an annuity -- and designate which one you receive -- if your share of the plan being terminated is worth more than $1,750. (The $3,500 limit applies only if you leave before the company terminates the plan.)

MORTGAGES Q. My mortgage company offers a funds-held account in which I can invest up to a year's worth of mortgage payments. The account pays 8.95%, equal to the interest rate on my mortgage, but the money can be applied to the mortgage only if I get behind on payments. Should I invest in this account? James Nolen Oologah, Okla.

A. Probably not. Funds-held accounts are designed mainly for farmers and ranchers. Because of the cyclical nature of their businesses, they need money in reserve for future mortgage payments. The chief advantage of such an account: it pays the same rate of interest that the bank collects on the loan, thus sometimes offering a higher return than on other nonspeculative forms of investment. But your money is not insured, and once deposited it cannot be returned to you unless you sell the property.