On Air: Dan Ruttenberg Shares Estate Planning Tips for the Elderly

Preparing in advance is vital if you want to protect your assets and have a say in how they are passed on. SmolenPlevy Principal Dan Ruttenberg, JD, CPA, LLM shares estate planning tips on local TV show, Senior Living in Alexandria.

“Legal documents are tools to address issues,” Ruttenberg tells Senior Living in Alexandria host Jim Roberts. It is important to have documents that keep you covered in case of death or disability. Particularly in the event of a disability, you want to have confidence in who is making decisions on your behalf.

What happens if you don’t have an estate plan in place? That will depend on the circumstances at the time — Ruttenberg explains important estate planning tips, including how to avoid probate in the complete segment above.

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.

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.

On WUSA 9: Safeguarding Online Accounts After Death

In today’s digital and “paperless” age, it is hard staying on top of all our online accounts. However, it is important to keep record of “digital assets” as a part of your estate planning. On WUSA 9SmolenPlevy Principal Jason Smolen joins anchor Mike Hydeck to discuss tips for safeguarding the location and access information of your online accounts and social media.

Smolen suggests making a list documenting the login information for every online account you have and ensuring that there is a current paper copy of that list. After death, that paper list will inform your loved ones of what accounts exist. However, having the login information and passwords may not entitle beneficiaries to use your online accounts on behalf of your estate. Many service agreements and some federal laws prohibit others from using your accounts in your absence.

Preparing a list of online accounts is an important first step in protecting access to your digital assets. Smolen further suggests providing instructions on what to do with each account in the event of death.

Watch Smolen on WUSA 9 above.

NewsChannel 8: Jason Smolen’s Tips for Protecting Digital Assets

Traditionally, estate planning addresses one’s property and finances. Today, more and more people are looking to include their intangible assets like social media accounts, and online photos and videos in their wills. SmolenPlevy Co-Founding Principal Jason Smolen visits NewsChannel 8 to discuss the growing trend of protecting digital assets through estate planning on Let’s Talk Live.

Although laws regarding digital assets are evolving, Smolen says there are ways to ensure your online accounts and media are taken of upon your death. Some websites like Facebook have a feature that allows you to elect someone you’re “friends” with as your “legacy contact”.

For websites and services that haven’t caught on this feature, Smolen suggests going “old school” by designating who takes over each digital asset, and including a comprehensive list of all online accounts and login information in your will.

Digital information like downloaded music, video and books may not be considered assets after all, according to Smolen. Sometimes, purchasing art only means you’re only licensed to use the it while you’re alive.

Watch Smolen on Let’s Talk Live above.

On WNEW Radio: Jason Smolen Explains Why Digital Assets Should Be Apart of Your Estate Plan

Typically, one’s estate plan would account for his or her property and finances. What about online property such as e-mail accounts and social media profiles? SmolenPlevy Co-founding Principal Jason Smolen tells WNEW Radio why taking “digital assets” into consideration when planning an estate is important.

With so many lives revolving around technology, digital assets like Facebook accounts, Flickr photos, YouTube videos and iTunes collections should be properly disposed when one dies. “It’s so much a part of the fabric of what we do everyday, they don’t realize that it lives beyond them,” says Smolen.

While planning one’s estate, Smolen suggests designating who will take over online accounts and keeping login information attached to your paper will. This information lets heirs know what accounts exist and how to access them.

Smolen anticipates seeing states make more laws on how to deal with digital assets.

Listen to Smolen on WNEW Radio below:

Jason Smolen Shares Ways to Keep Inheritances from Unnecessary Taxation on MainStreet.com


When estate planning, consider whether taxes will turn an inheritance into a burden for your beneficiaries. In a just-published article on MainStreet.comSmolenPlevy Co-founding Principal Jason Smolen discusses various tools used to transfer wealth while limiting the impact of estate taxes.

The federal estate tax exempts $5.43 million for individuals and $10.86 million for couples. However, 16 states and the District of Columbia impose state estate taxes of up to 20% on estates valued at more than a specified amount. For example, in Maryland, heirs may face an additional tax of 10% to 26% upon receiving their inheritance.

While Roth IRAs (which are exempt from income taxes) and trusts are ways to safeguard inheritance from taxes, Smolen suggests three other tools to consider:

  1. Gifting: Gifts to heirs before death reduce the size of an estate and can help it avoid additional estate or inheritance taxes. A person can gift up to $14,000 to an individual (or $28,000 with a spouse) each year without incurring a gift tax.
  2. Real Estate Transfers: Because real estate often represents a significant portion of the estate, a limited partnership to transfer property may be effective. Beneficiaries can be given shares in the limited partnership directly or in a trust.
  3. Life Insurance in a trust: If a policy is held by a trust that is set up outside of an estate, insurance proceeds are generally tax free.

Read the full article on MainStreet here.

Jason Smolen Discusses the Step Up Provision with MainStreet

Smolen - Step Up Provision

Traditionally, heirs have avoided taxes on increases in the value of a decedent’s portfolio assets. However, President Obama proposed ending of this provision, commonly referred to as the Step Up provision in the capital gains tax, during his State of the Union address in January. SmolenPlevy co-founding Principal Jason Smolen explains the implications of the proposal in a just published article on Mainstreet.com.

Under the proposal, the capital gains tax on inherited assets would only exempt the first $200,000 for a married couple and $100,000 for singles. The elimination of the “step up” provision could become an accounting challenge for heirs. “You would have to know what the deceased paid to acquire an asset to determine the original cost basis for all inherited assets,” Smolen tells MainStreet.

Although the end of “step up” is still just a proposal, there may be an increase in using life insurance policies as an estate planning tool. Smolen says insurance can be an add-on benefit that can reduce the frictional costs of taxes.

Read the full MainStreet article here.

In The Media: Jason Smolen Takes a Close Look at Proposed Changes to the Capital Gains Tax

Jason D. Smolen

The proposal to end the “step up” provision in the capital gains tax could mean substantive changes in how inheritances are taxed. Just published, SmolenPlevy Co-Founding Principal Jason Smolen takes a closer look at the proposal in Wealth Management and MainStreet.

President Obama’s plan to close the “trust fund loophole” could affect more than just the rich. Any beneficiary would have to look up the original cost of just about any asset they inherit—causing them to spend time and money sorting out the financial details.

Without the “step up” provision, beneficiaries may need to set up additional trusts to protect their assets from increased taxation. Some people can transfer assets to trusts, which would take them out of the tax picture, or sell the assets entirely instead of passing on potentially huge tax bills to their heirs.

The proposal is a long way from reality, but its adoption will make estate planning more complicated, according to Smolen. Families may need additional professional advice from estate attorneys and accountants to devise a strategy to maximize assets and minimize taxes.

Read Smolen’s exploration of the proposed changes on WealthManagement.com and MainStreet.

In Sickness and in Health? A Lesson in Trust(s)



Your spouse has run the family business for years, but lately you’ve worried that their declining health is having a major financial impact. When is the right time for you to take over management? That issue played out publicly recently as Shelly Sterling fought for and won control of the Los Angeles Clippers from her husband, Donald Sterling. The battle, which ultimately resulted in the sale of the team, was prompted by Donald’s racist comments caught on tape and his permanent ban by the NBA.

Finish Reading “In Sickness and in Health? A Lesson in Trust(s)” on LinkedIn