Your Money

By Julie Rawe

NO FREE RIDE The SEC recently forced several companies to yank bogus online offerings of "free" stock. The catch? The issuers were trying to bring traffic to their websites and get valuable personal information from the recipients. Web-WorksMarketing.com said its free stock was worth $38.40 a share, which beats the company's gross revenues of $26. Likewise, American Space Corp. distributed shares, although it had no offices, employees or contracts. The investing lesson? Free could equal worthless.

INHERITED IRAS The IRS seems to agree with fund companies that allow inherited IRAs to pass on after you do. In a private-letter ruling, the agency has given the go-ahead for nonspouse beneficiaries to roll the accounts over. The maneuver can spare your heirs a hefty tax bill by avoiding the customary one-time cash-out. Naming another beneficiary will not extend the life of the account, and payments must be distributed at least as rapidly as the pace set by the original owner, regardless of who receives the cash.

ULTIMATE PORTFOLIO? Morningstar, the firm that rates thousands of mutual funds, has reshuffled its own 401(k) lineup, which is worth pondering. With few exceptions, the company considered only funds that had at least a three-year track record. Similarly, the funds' managers had to have at least a three-year tenure at the helm. The company also chose far more stock funds than bond funds, citing its young employee base (average age: 30). For more on the firm's rationale, visit www.morningstar.net

--By Julie Rawe