Before going to work, consider an umbrella

Q: I work at a day-care center for a nonprofit organization. My employer has a general-purpose insurance policy. But should I carry private umbrella liability insurance? M.S., Westfield, N.J.

A: "Given the litigious nature of our society, it's probably a good idea," says Loretta Worters, with the Insurance Information Institute in New York.

But first ask your employer if it has liability insurance that covers staff and how much coverage you would have in the event of a lawsuit. If the dollar limits are low, "see if you can buy extra coverage through your company's policy," Ms. Worters says.

Otherwise, seek out umbrella insurance that provides you with protection of up to $1 million if you are singled out in a lawsuit.

"Check with your homeowner's insurance company, assuming you own, to see if they can offer you an umbrella policy. This will extend your homeowner coverage to include perils outside the home," she says.

Q: I'm 37, with a son. I have about $10,000 to $12,000 to invest. Is that enough? Do I contact an investment company? W.G., Lovelady, Texas

A: "First make sure you have paid off your credit debt, have sufficient insurance for you and your son, and you have savings for emergencies," says Paula Hogan, a financial adviser with Hogan Financial Group in Milwaukee. If anything is left, then put a small amount of money - limited to $2,000 - into an individual retirement account, she says. To set one up, contact a no-load mutual-fund group, such as Fidelity, T. Rowe Price, or Vanguard.

Q: What is a dormant trust and when do you use it? Name withheld, Eau Claire, Wis.

A: According to a spokesperson for the American Bar Association in Chicago, a dormant trust is a colloquial phrase used to describe a trust that currently has no assets, but springs into action when something occurs, such as the death of the trust creator.

It can be used by people who want to transfer assets at a later point in time after certain conditions are met. To set up such a trust, consult a local attorney.

Questions about finances? Write: Guy Halverson The Christian Science Monitor 500 Fifth Ave., Suite 1845 New York, NY 10110 E-mail: halversong@csps.com

(c) Copyright 1999. The Christian Science Publishing Society