Question: Last February, my wife and I purchased new Medicare Supplement insurance policies from a salesman who had sent us an unsolicited mailing. His price was better than the policies we had, and since we are on a fixed income, every penny counts. He came to our home and seemed very nice. He called us several times to make sure we were doing all right, and told us about variable annuities which we did not purchase because of the long-term commitment of our money. Then, about a month ago, he called and told us that he had access to a new investment that could immediately triple our monthly cash without risk and would get us our money back in less than a year. Since most of our funds are in one year CD's, we told him to come by to talk to us.

He explained how this subsidiary of a big overseas drug company was on the brink of finding a cure for cancer and, instead of selling stock, they were borrowing money from individuals for nine months and were paying 14 percent interest. Since our CD's were only paying six percent, we told him that we would purchase a $10,000 note; however, we got cold feet and, when he called to make an appointment to pick up the check and deliver the note, we told him that we had changed our mind. He became very angry and told us that he had put up the money to get us the note and that we had to take it or we would be sued. He had frightened us terribly. Can he make us go through with this?

Answer: No. In actuality, what this insurance agent is trying to sell you is an unregistered security from which he will receive a handsome commission and you will receive an empty promise of repayment from a non-existent or shell company.

But you're not alone: In a number of states, insurance agents and others are selling fraudulent promissory notes which tout high interest and low risk. State and federal securities regulators have taken action against hundreds of salesmen and companies which have duped thousands of individuals, many elderly, out of millions of dollars.

Unless the insurance agent is securities licensed, he should not be selling any type of security or variable annuity product in the first place. We suggest that you contact you state securities regulators and insurance commissioner immediately to report your problem. By no means should you give him a check. Contact a lawyer immediately to write him a letter telling him not to contact you again. We also suggest that you check out the Medicare Supplement policy you purchased from this individual as it also may be too good to be true.

Remember: "There ain't no free lunch." The higher the promise of a reward, the higher the risk.

Question: I am a 78 year-old widow, own my own home and an acre of land, and have some cash investments. I am in good health, but want to plan for what may happen if I need to go into a nursing home. I have no objection to my money being spent for my care, but my home has been in my family for 100 years, and I want to make sure that this property goes to my three children. How can make sure this happens?

Answer: You can gift a remainder interest in your property to your children now so that, at your death, title will pass automatically to them in equal shares. By doing this, you will maintain the right to live on the property for the rest of your life. You should first have the property valued in order to determine the amount of the gift to each child. For example, if your property is currently valued at $100,000, the remainder interest will be valued at $52,951 based on federal tables. This means that each child will receive a gift of a little over $17,000. As such, you will be required to file gift tax returns next April 15th, but no taxes will be due. But there are drawbacks to making this gift: 1) You will not be able to sell or mortgage the property if you need money without the consent of all of your children. 2) Depending on the average monthly private pay nursing home rate in your state, if you enter a nursing home and apply for Medicaid, you may suffer a period of disqualification. 3) If one of your children dies, his or her spouse and/or children may become an owner of an interest in the property and may be able to force a sale. We suggest that you contact a qualified lawyer to review all of your options before you sign any deed.