Requirements to Protect Personal Information
Like many business professionals, your laptop and cell phone have become a corporate archive of important and confidential business information about your company. Smart phones have allowed sensitive data to be available at your fingertips that can be carried most anywhere. Identity thieves can have an easy time of accessing data that is legally protected if you don’t address security issues in your overall Information Technology plan. Many businesses find it more cost-effective to secure the information they have rather than try to repair the damage and rebuild consumer confidence after a data loss or breach. Moreover, federal and state laws require companies to implement reasonable information security practices. Depending on your business and the type of information you keep, these laws may apply to you.
A single basic standard for data security
The Federal Trade Commission has tried to develop a single basic standard for data security that strikes the balance between providing concrete guidance, and allowing flexibility for different businesses’ needs. The standard is straightforward: Companies must maintain reasonable procedures to protect sensitive information. Whether your security practices are reasonable will depend on the nature and size of your business, the types of information you have, the security tools available to you based on your resources, and the risks you are likely to face.
Simple security tips
High standards of data security should be implemented on portable electronic devices that store or provide access to sensitive information, such as employee and customer information. Many smartphone and laptop users, however, ignore simple security measures. Here is a list of simple security tips that will help keep your data confidential
Passwords.
Avoid jotting down your passwords on a sticky note in your laptop bag. Don’t use shortcut keys to program passwords, access codes, or credit card numbers. Find ways to memorize your passwords and use strong passwords that consist of numbers and letters.
Don’t collect and keep data unnecessarily.
If you don’t have a valid business reason to collect personal information, don’t ask for it in the first place. Review the forms you use to gather data — like credit applications and fill-in-the-blank web screens for potential customers — and revise them to eliminate requests for information you don’t need. Before traveling, check your carry on, smartphone, and laptop for data that shouldn’t go with you. Unless you have a legitimate business justification, don’t hold onto customers’ credit card information, including account numbers and expiration dates. Keeping sensitive data longer than necessary creates an unwarranted risk for fraud. Don’t use Social Security numbers as employee identification numbers or customer locators.
Keep things in sight.
According to a company that insures personal computers, 10% of laptop thefts occur in airports. Keep your eye on your electronic devices when going through airport screening. Don’t put your cell phone or computer on the conveyor belt until the person directly ahead of you has made it through the metal detector.
Laptop and smartphone screens.
Consider buying a filter for your laptop/smartphone screen if you work on confidential documents while you travel.
Hotel business center. Don’t inadvertently leave printed documents on the printer/copier/fax machine.
Cell phone conversations.
Sensitive information can be blurted out during loud cell phone conversations. Remind yourself to keep your guard up in public.
Home computers.
Companies with a diligent IT department may keep the companies computers and other electronic devices up-to-date with the latest firewall, anti-virus, and anti-spyware protection and the latest security patches, but if your home computer is used even occasionally for business, robust security software should be installed and kept up-to-date on home computers as well.
Storage.
When discarding or recycling old computers and cell phones, deleting files using keyboard commands is not sufficient because data remains in a device’s memory. Ideally, you should destroy the hard drive or memory device.
Have a written policy in place.
If you must keep information for business reasons or to comply with the law, develop a written records retention policy to identify what must be kept, how to secure it, how long to keep it, who’s authorized to access it, and how to dispose of it securely when you no longer need it.
For more information, see the FTC’s guide Protecting Personal Information: A Guide for Business.
Dan A. Penning
More and more checking account owners are using their debit cards or online bill paying methods. With these rising trends, checkbooks are left unaccounted for, for periods of time. Check fraud can occur in one of many ways, such as (1) the victim writes a check but it is intercepted by a third party who fraudulently alters the check, (2) a third party creates an entirely new fraudulent check from the information on the real check, or (3) checks are stolen from the victim and the third party writes fraudulent checks, forging the victim’s signature. For purposes of this article, the victim is a customer of the bank that charges the payor’s (the victim’s) account.
Planning for the succession of ownership and operation of the family business for next generations presents many tax and non-tax challenges for the family business owner. Oftentimes, keeping the family business in the family involves having to choose between implementing strategies to accomplish tax benefits at the expense of implementing other strategies that may provide a greater likelihood the business will continue to prosper and be managed properly in the future.
Mr. Davis says he recently upgraded his company’s retirement plan from a Simple Individual Retirement Account plan to a 401(k). As a result, he will receive a company match and can contribute a maximum of $22,000 this year, versus $14,000 with a Simple IRA.
Michigan Governor Rick Snyder called the consideration of his proposed Executive Budget a “defining moment” for the state this week as the Executive Budget was submitted to state legislators for the 2011-2012 fiscal year. Snyder commented on his budget as an opportunity to “stop living in the past and start looking to the future.”
After great speculation and debate, Congress has now passed and President Obama has signed a tax package which gives individuals and businesses some predictability for the next two years through December 31, 2012. The Act extends the Bush-era tax cuts, provides estate tax relief, an “AMT” patch, a reduction in employee paid payroll taxes and provides businesses with new incentives to make capital investments by extending depreciation and tax credits.
Businesses also received extended and other benefits under the Act. These benefits included the ability by businesses to write off 100% of their equipment and machinery purchases and additional 50% first year depreciation. The Act also provides for work opportunity tax credits, research tax credits and business tax extenders including a 15 year recovery period for qualified leasehold improvements, restaurant building, retail improvement credits and tax incentives for empowerment zones.
Your planning needs remain our top priority. In furtherance of our commitment to maintain our expertise on estate, tax, business and succession planning, Dan Penning will attend the University of Miami’s 45th Annual Heckerling Institute on Estate Planning the week of January 10, 2011 to hear presentations by nationally-regarded experts on the planning implications of the new tax act for 2011 and beyond. In addition, the conference will host presentations with updated information and strategies focusing on planning for lifetime transfers of individual wealth/assets and business interests.
A problematic trend seems to be emerging with banks failing to properly discharge liens of previous property owners. Recently when I’ve been assisting clients in the sale of both commercial and residential real estate we’ve encountered significant problems caused by banks that failed to properly discharge liens of previous owners after my clients purchased the property. These lien discharge problems have in some instances almost caused sales to be terminated and have caused significant delays resulting in hardship and increased costs for the parties to the transaction.
Recent oral arguments presented by attorney Dan A. Penning, before a Michigan Court of Appeals panel of judges, resulted in a unanimous 3-0 vote in which the Appeals judges upheld the trial court’s decision dismissing the case.
Virtually any newscast or newspaper continues to talk about the “tax increases” that will become effective January 1, 2011. While the general concept is widely reported there seems to be little attention being given to the specific taxes that will increase if no action is taken by the lame duck congress by the end of the year. The following information is not being offered as any political objection or endorsement but rather just factual information that I wanted to share with everyone for the express purpose of understanding the increases and encouraging everyone to consult with their tax consultants and legal counsel to determine whether any planning before the end of the year makes sense for you.
When Americans prepare to file their tax returns in January of 2011, they’ll learn the AMT won’t be held harmless, and many tax relief provisions will have expired.
As we have mentioned in previous emails and other communications from our office, it is important that children, once they reach the age of majority (18 in Michigan), execute a Financial Power of Attorney form and Medical Power of Attorney. A Medical Power of Attorney allows the individual nominated in the document the right to have access to medical records and be involved in medical decision making. A Financial Power of Attorney allows the agent designated to handle financial matters on behalf of the young adult. For students going to school out-of-state, the question arises whether to have legal documents created in the student’s home state, the state in which they attend school, or both. While the laws in most states are comparable so that a Power of Attorney created in one state usually will be respected in another, that is not always true.
Recently, many of my estate planning clients have asked questions about Lady Bird Deeds and when it is appropriate to use these instruments in estate planning. Like any planning tool, a Lady Bird Deed can be helpful in some situations, but is not appropriate in all cases. The use of a Lady Bird Deed in the wrong situation can lead to unintended or negative results.
The most common type of deed that people are familiar with is where there is an outright transfer of ownership from one party to the other, such as in the sale of a residence. This most common type of transaction utilizes a “fee simple” deed which is used to convey property from one (or more) owner to another. When Person “A” conveys real property to Person “B” by a “fee simple” deed, Person “B” becomes the owner of the property immediately upon the execution of and delivery of the deed.
In some situations, Lady Bird Deeds can also be used as part of Medicaid planning and, in fact, that is where they first became very popular. A Lady Bird Deed may work well where someone who is currently receiving Medicaid benefits as a way to pass the property at their death without the necessity of probate. This is true because Medicaid policy provides that a Lady Bird Deed is not a “divestment” (transfer of assets that results in a penalty).
In addition, certain transfers invalidate the ability of an individual to claim a homestead exemption in the state of Michigan with respect to their residential property taxes.
