New laws may clarify estate planning for online assets

Including online assets in estate planning is a new thing, and the legal rules aren’t always entirely clear. But a number of states are now considering laws that will make things easier.

For instance, Delaware recently became the first state to pass a comprehensive law addressing what happens to someone’s online assets when they pass away. And 13 other states are currently considering such laws, so it’s likely the legal landscape will change dramatically in the next few years.

The Delaware law says that if a person dies, his or her executor can take control over the person’s online assets and distribute them to heirs. The same is true for trustees and other fiduciaries. This will be allowed unless the person specifically states otherwise in his or her will. [Read more…]

Converting to a Roth IRA can help with estate planning

Converting a traditional IRA into a Roth IRA has many advantages and disadvantages, but what many people don’t realize is that it can provide some estate planning benefits.

If you convert to a Roth, you’ll have to pay income tax on the value of the IRA right away – just as if you received the entire amount as income. On the other hand, all future withdrawals will be tax-free, and there are no minimum required distributions during your lifetime.

Converting may make sense if (1) you have enough assets to pay the income tax without dipping into the IRA itself, and (2) you won’t need to take distributions from the IRA during your lifetime and can leave it to your heirs. [Read more…]

Families with disabled children get new tax-saving accounts

Congress recently approved a new kind of tax-saving account for the benefit of families with disabled children. It’s called an Achieving a Better Life Experience, or ABLE, account.

An ABLE account is a bit like a 529 college savings account. Family members and others can contribute to it on an after-tax basis, up to $14,000 per year each. The money in the account can be invested tax-free, and withdrawn tax-free for specified purposes. These purposes include a disabled beneficiary’s housing, education, transportation, health, employment support, and use of assistive technology.

The beneficiary must have become disabled before age 26, and can only have one account. Total contributions to the account are subject to the same limits as 529 accounts. [Read more…]

How to avoid common trust mistakes

Trusts can be the linchpin of a solid estate plan. But it’s important to remember that you can’t just set up a trust and forget about it. It’s a good idea to periodically review how your trusts are working, to make sure you and your family are getting the full benefit of them. Not doing so can be costly!

Here are just a few things to consider, and some common mistakes to avoid:

► Is your trustee still the best person for the job? If your trust arrangement allows you to change the trustee, you should periodically give some thought to whether the person you’ve selected is still the best choice. [Read more…]

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Companies can’t prohibit workers from discussing their salaries

A company can’t prohibit its workers from disclosing and discussing their salaries, according to a federal appeals court in New Orleans.

That’s because federal labor law says that employees always have a right to talk about the terms and conditions of their employment. And that’s true regardless of whether the employees belong to a union.

The case involved a non-union trucking company in Fort Worth, Texas that made its workers sign a confidentiality agreement. The agreement said that workers could not reveal any “financial information” or “personnel information” to anyone outside the company. [Read more…]

‘Puffery’ on product label was okay, court says

A manufacturer isn’t allowed to make false or misleading statements in its advertising or on a product label. But in a recent case involving the Gerber baby food company, a California court ruled that claims made on its labels, while vague and open to interpretation, were not over the line.

Gerber said on some of its labels that its products were “an excellent source” of various vitamins and minerals, that they provided “natural immune support” and helped create “healthy growth and development,” and that they contained “no added sugar.” [Read more…]

Is a ‘letter of intent’ binding?

Businesspeople who have agreed on the general terms of a deal often sign a “letter of intent” that lays out these terms in writing. The idea is to make sure that everyone is on the same page while a formal contract is being drafted.

But what happens if you sign a letter of intent with someone, and then they walk away from the deal? Is that okay?

In general, the answer is yes – a letter of intent isn’t a binding contract; it’s merely an expression of a plan to negotiate a binding contract. [Read more…]

Beware of ‘off-the-shelf’ forms for background checks

A company can conduct background checks on job applicants, but there are strict federal laws governing how to go about getting applicants’ permission to do so.

Increasingly, businesses are using “off-the-shelf” forms for this purpose, or are contracting with third-party vendors to set up an online job application process.

The problem is that if the forms or the online services don’t comply with the letter of the law, the company itself may be on the hook.

This happened recently to the Whole Foods supermarket chain, which contracted with a vendor to set up an online application system. [Read more…]

Businesses sued for disclosures of health care information

The federal law called HIPAA requires anyone who has access to medical information to keep it confidential. Businesses that violate the law can face penalties from the government. A big new threat, though, is that recently some courts have also started allowing people whose information was improperly disclosed to sue for damages in court.

This is significant, because the HIPAA law applies not only to doctors and hospitals but also to businesses that have even occasional access to medical data. This includes dentists, pharmacies, chiropractors, rehab facilities, insurers, data processing companies, transcriptionists, accountants and consultants who work with medical clients, and others. [Read more…]

Does your insurance cover a data breach?

Given the rapid increase in data breaches – affecting not only Fortune 500 companies but smaller businesses as well – it’s worth checking whether your current insurance policy covers cyber losses.

That’s especially true now that almost every state requires companies to notify customers if their data has been compromised.

A growing number of insurers are now offering cyber-liability policies. These typically cover the costs of investigating a data breach and notifying customers, loss of business and reputation, and future credit monitoring.

A recent study by the Ponemon Institute found that businesses with fewer than 10,000 customer records are more likely to be hacked than businesses with over 100,000 records, in part because they’re less likely to have robust defenses against hackers. [Read more…]

You may need a policy covering employees’ use of cloud storage

Employees are discovering that cloud storage services are a great way to access work-related data at home and on the road, and to collaborate with co-workers, especially those who work remotely.

Unfortunately, they’re also a great way to make your confidential data insecure – which is why you may need a thoughtful policy covering their use.

Cloud services allow a user to log into an account, upload documents or files, and then access or download them from any device, anywhere and at any time. Users can sync folders across devices, and can also share or sync files with others. [Read more…]