On Air: Daniel Ruttenberg Shares Why You Should Have a Will in Order on ABC 7

A court confirmed that music superstar Prince died without a will, which leaves complicated questions about who inherits his vast fortune. There are at least six siblings, including half siblings, who may inherit, and the confusion is just starting. In an interview on ABC 7, SmolenPlevy Principal Daniel Ruttenberg explained the problems that may occur when you die without a will, and why it’s vital to make sure that doesn’t happen to you.

Ruttenberg explained that without a will, Prince could not direct where his assets should go. “I think that’s a travesty,” said Ruttenberg. Often, people avoid estate planning because they don’t think they have enough assets. But Ruttenberg said you don’t need to own much to learn from Prince’s mistake — plan now and prevent the heartache and need for the court’s intervention after you’re gone.

A will can dictate to whom your money goes, protect your children’s interests in their inheritance and help avoid taxation. News reports predict Prince’s siblings will split the multi-million dollar estate, but Ruttenberg indicates that someone who claims to be Prince’s child could trump all of that.

Ruttenberg told ABC 7’s Kimberly Suiter that whoever does inherit Prince’s estate isn’t necessarily going to be better for it. Sudden wealth has its own set of problems, and many people who inherit a fortune overnight end up blowing it all quickly. They can end up broke, homeless, and in a worse position than they were before getting the money.

Four SmolenPlevy Attorneys Named to 2016 Virginia Super Lawyers & Rising Stars

 

2016 Virginia Super Lawyers

SmolenPlevy is pleased to announce that Principals Alan Plevy, Daniel Ruttenberg and Kyung (Kathryn) Dickerson have been named 2016 Virginia Super Lawyers. Additionally, Associate Joshua Isaacs has been recognized as 2016 Virginia Rising Star. Both honors are awarded to no more than five percent of attorneys in each state.

Super Lawyers is a rating of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a multiphase process that includes a statewide survey of lawyers, an independent evaluation of candidates and peer reviews.

Northern Virginia Magazine Names SmolenPlevy Attorneys ‘Top Lawyers’

Northern Virginia Magazine Top Lawyers 2015

Northern Virginia Magazine has named SmolenPlevy Principals Jason Smolen, Alan Plevy, Daniel Ruttenberg and Kyung (Kathryn) Dickerson to its 2015 list of ‘Top Lawyers’. Area attorneys were invited to nominate their peers for the designation.

“To be nominated by our fellow attorneys in the Northern Virginia area is quite an honor,” said Smolen. Plevy added, “We are pleased to be among a very distinguished and accomplished group of lawyers.”

Smolen, Plevy, Ruttenberg and Dickerson have previously been name Top Lawyers by Northern Virginia Magazine in 2013 and 2010.

SmolenPlevy Named to 2016 Best Law Firms

2016 Best Law Firms

The 2016 Best Law Firms rankings, published by U.S. News & World Report and Best Lawyers, has included SmolenPlevy for excellence in the areas of family law, and trusts and estates.

Firms included in “Best Law Firms” are recognized for professional excellence with persistently impressive ratings from clients and peers. The 2016 “Best Law Firms” ranking complements the 2016 edition of “The Best Lawyers in America,” where Jason Smolen, Alan Plevy and Daniel Ruttenberg are recognized.

About 2016 Best Law Firms

The U.S.News – Best Lawyers 2016 Best Law Firms rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process. To be eligible for a ranking in a particular practice area and metro region, a law firm must have at least one lawyer who is included in Best Lawyers in that particular practice area and metro. For more information on Best Lawyers, please visit bestlawyers.com.

Death and Taxes: Gifting Money Lowers Taxes but Might Raise Anxieties

There’s a saying that death is hardest on those left behind. This is especially true if those left behind receive an unexpected and hefty estate tax bill. Estate taxes—or “death taxes,” as they’re often called— can be burdensome. Perhaps the most challenging thing about estate taxes is that they’re always changing and we generally don’t know if we’re going to die in a year when estate taxes favor our heirs.

Jason D. Smolen

Jason Smolen

For example when George Steinbrenner died in 2010, there was no estate tax. Mr. Steinbrenner’s heirs did not have to pay federal taxes on his $1.15 billion estate. Needless to say, 2010 was an anomaly— the residual effect of President Bush’s phased-out tax cuts. When the estate tax expired at the end of 2009, most people expected Congress would reinstate it. They didn’t. As a result, the heirs of those who died that year did not have to pay any estate taxes.

In the years that immediately followed, there was a lot of uncertainty as individuals and their attorneys waited to see if Congress would act. If Congress chose not to act, the estate tax law would have reverted to what it was in 2001 and any estate valued at more than $1 million would have been taxed at a rate of 55 percent. Note that the valuation of a $1 million estate includes real estate, and many homes in high-dollar real estate markets can easily be valued at more than $1 million. This leaves heirs with little after the sale of the house.

With this uncertainty, it was hard to plan. The possibility that the law would revert to the $1 million tax exemption level at the end of every year worried people. So, anticipating the worst, people acted. Starting in 2011, an individual could give away to others up to $5 million tax free—and many did just that. In an effort to protect their estate from taxation, many people increased their gifts to their loved ones. The idea being that if they died during a year when Congressional inaction resulted in a punitive estate tax, their heirs would have already received some of their legacy tax-free.

Now, four years later, the $5 million unified estate and gift taxes exemption has held steady. (Because it’s indexed for inflation, this year an individual can give away $5.43 million without it being taxed. Note that there is an unlimited charitable deduction and there is an unlimited marital deduction provided that your spouse is a US citizen.) But some people are beginning to wonder if they gave away too much, too soon.

For example, a number of people started aggressively gifting money when they were still working. Now that they’re retiring, they are beginning to wonder if their estate is sufficient to see them through their retirement years. It’s a very different feeling to be living on resources instead of earning resources. It’s not uncommon to be concerned about spending down principal and outliving it.

Daniel H. Ruttenberg

Daniel Ruttenberg

When planning your estate, you should give serious consideration to the “what ifs” that loom down the road and structure your estate accordingly. While giving money tax-free to your loved ones is nice, make sure you can take care of yourself. It is important to be prepared. You don’t want any surprises when it comes to your finances. Below are things to consider to make sure you keep what you need while still giving away what you want:

1. Be realistic about your expenses. Most people underestimate what they spend. They focus on the mortgage payment, a car payment, insurance, and the groceries but discount the monies spent on clothes, travel, hobbies and pets, home repairs, and utilities? The truth is, we all spend more money than we think we do. When planning your gifting, look at what your estate’s worth and carve out a realistic amount of money for what you’ll need to live comfortably and do the things you love over the course of many years. Even if you have long-term care insurance, you may still need to pay for nursing care or help if your health fails – this is something else you should consider. Work with your attorney to project future expenses and plan accordingly.

2. Don’t be afraid to reevaluate. If you’re someone who gave away a lot of money in recent years and are now beginning to worry it might have been too much, don’t panic. Sit down with your estate attorney and look at how much you gave, how much you have left and how much you need to live on. If you need to scale back for a few years and not gift to others for a while, that’s okay. Don’t let the fear of possibly punitive estate tax laws dictate your actions to the detriment of your own financial security.

3. Live the plan. Once you have a plan, live it. It’s hard to transition from making your assets grow to living on them. It leads to a lot of second guessing. But chances are, if you created an estate plan with your attorney, you’re on the right path. If you have questions or are worried that you need to modify your estate plan, then certainly sit down with him or her again and talk it over.

Again, the trouble with the future is that it’s uncertain. We don’t know what Congress will do and we don’t know when we’re going to die. But despite this uncertainty, it is possible to plan so you’re able to live the life you want to live.

Read more articles from the Summer 2015 Report from Counsel here.

SmolenPlevy Named to 2015 “Best Law Firms” by U.S. News & World Report

SmolenPlevy named to 2015 "Best Law Firms" as a first-tier family law firm.

U.S. News & World Report and Best Lawyers has ranked SmolenPlevy as a first-tier Washington, D.C. law firm in the practice area of family law in its annual “Best Law Firms” publication.

Firms included in “Best Law Firms” are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal expertise. Ranked firms, presented in tiers, are listed on a national and/or metropolitan scale. Receiving a tier designation reflects the high level of respect a firm has earned among other leading lawyers and clients in the same communities and the same practice areas for their abilities, their professionalism and their integrity.

The 2015 “Best Law Firms” ranking complements the 2015 edition of “The Best Lawyers in America,” where Alan Plevy and Daniel Ruttenberg are recognized.

Daniel H. Ruttenberg Receives ‘AV Preeminent’ Rating from Martindale-Hubbell

Daniel H. Ruttenberg AV Preeminent

SmolenPlevy Principal Daniel Ruttenberg is ‘AV Preeminent’ rated by Martindale-Hubbell, confirming that his legal abilities and professional ethics meet the very highest standard.

Martindale-Hubbell Peer Review Ratings reflect a combination of achieving a Very High General Ethical Standards rating and a Legal Ability numerical rating. ‘AV Preeminent’ is the highest rating given by Martindale-Hubbell and is a testament to the fact that a lawyer’s peers rank him or her at the highest level of professional excellence.

Previously, Ruttenberg has been named a Best Lawyer by Best Lawyers, Power Player and Legal Elite by SmartCEO Magazine, Virginia Super Lawyer by Super Lawyers and Top Lawyer by Northern Virginia Magazine.

To read a complete list of accolades for SmolenPlevy’s attorneys, please visit the Attorneys page.

The Wrong Way to Avoid “Trust Fund Kids” And Other Lessons from Philip Seymour Hoffman’s Will

SmolenPlevy Co-Founding Principal Jason D. Smolen

According to media reports, the late actor Philip Seymour Hoffman didn’t leave any money to his three children directly because he feared they would become “Trust Fund Kids”. While his concerns were understandable—many people worry about giving their children too much money too soon—there are a number of estate planning strategies that he could have used to better provide for his family after his death. Hoffman died in February 2014, leaving an estimated $35 million estate to his long-time companion, Marianne O’ Donnell.

Jason Smolen suggests that Hoffman’s estate may face a large and unnecessary estate tax bill because the actor and O’Donnell weren’t married. His estate may be hit with both federal and New York state estate taxes, which could total $14 million dollars. Had they tied the knot, the money would have passed tax free from Hoffman to O’Donnell.

As for the “Trust Fund Kids” concern, Smolen certainly understands the issue. “Earning and spending money are two different activities,” says Smolen. “If your children haven’t engaged in the first, they may not manage the second well.” A possible solution is to work with an estate planning attorney to set up a revocable living trust crafted to provide your children with a secure future without creating a disincentive to work. The trusts can provide for the payment of expenses associated with college, health and financial issues, and can make distributions when the children have achieved certain life goals or even match salaries once they’ve grown and started careers.

Another key is naming a trustee who will make sure your trust is appropriately administered. “It should be someone who understands your values,” says Smolen. In Hoffman’s situation, while his partner may know and understand what he wanted for the children, she will still be making those financial decisions without guidance or restrictions. Essentially, without a trust to set parameters, O’Donnell can do whatever she wants. While there’s no reason to believe she’ll misspend the money or deprive the children, life is unpredictable—she could be hit with illness, emergencies or even a future divorce that depletes the funds. Further depending on what estate planning O’Donnell does before she dies, the money could be taxed again, whether she gives it to the children, charity or to family and friends.

Smolen points out that trust funds aren’t just for the very wealthy. They are useful tools for anyone who will leave behind an estate and wants some control over their legacy. Also, a trust can help heirs avoid the delay caused by having an estate go through probate, where all the assets in the estate are legally accounted for before distributions are made.

A revocable living trust can be altered, updated and even cancelled. By spelling out your wishes, you can control how and when money passes—and to whom. Like many others, Philip Seymour Hoffman was legitimately concerned about how their inheritance would impact his children—but unfortunately, the lesson of his will is that he did not do all he could have to increase the positive and minimize the negative impact of his wealth on his children.

Jason Smolen and Dan Ruttenberg can assist you with your estate planning questions and concerns. Please contact SmolenPlevy at 703-790-1900.

For more insights and developments in the law, please read SmolenPlevy’s quarterly Report from Counsel.

Daniel Ruttenberg’s Supreme Court Experience Featured in Northern Virginia Magazine

Daniel Ruttenberg's Supreme Court Journey

It’s difficult to think of a more intimidating situation for an attorney than arguing in front of the United States Supreme Court, but this past April, SmolenPlevy principal Daniel Ruttenberg did just that. Ruttenberg argued the case of Hillman v. Maretta before the nine Supreme Court justices – a challenging undertaking for an attorney who rarely litigates.

The case began when Warren Hillman, a 66-year-old retired urban planner and longtime government employee, unexpectedly passed away in 2008. His then 61-year-old wife Jackie Hillman attempted to collect money from Warren’s Federal Employees’ Government Life Insurance (FEGLI) plan, only to have her request denied. The reason? The life insurance check (which was for over $120,000) had been sent to Warren Hillman’s ex-wife, Judy Maretta, who was still listed as the beneficiary on his life insurance plan. Struggling to make ends meet, Hillman sued Maretta.

What followed was several years of trials and appeals culminating in Ruttenberg’s argument before the Supreme Court in April 2013.  Read the full article, “The Case of the Preemptive Strike and the Wronged Widow” in the December 2013 issue of Northern Virginia Magazine, on newsstands now.

SmolenPlevy in the Community

October has been a busy month for SmolenPlevy Kyung (Kathryn) Dickerson and Daniel Ruttenberg, as they have made several presentations to different groups in the area.

On October 15, Dickerson led a seminar at The Women’s Center in Vienna, Virginia entitled Divorce, Custody and Support: The Discovery Process – Preparing Your Case. The seminar was designed to help women who are going through a divorce or expect they may be soon understand the different aspects of discovery and the rules that govern it. Dickerson explained the different aspects of discovery, the rules that govern discovery and ways to approach discovery in order to streamline their case, keep costs down and ensure that the relevant evidence is preserved for trial.

Dickerson joined Daniel Ruttenberg as he presented, “From Trial Court to the Supreme Court: My 3 ½ Year Journey to the Highest Court in the Land” to the Elder Law Section of the Fairfax Bar Association on October 15.  Ruttenberg also gave the presentation, which details his recent precedent-setting United States Supreme Court case Hillman v. Maretta, to the ReedSmith Litigation Group earlier this month. Ruttenberg will deliver remarks to the Capital Area Chapter of the American Association of Attorney-Certified Public Accountants on Thursday, October 24.