Groovy Estate Planning

May 8, 2017 | Wealth Management

Growing up, The Brady Bunch was on every day at 4 right after Gilligan’s Island.  That was the perfect daily double for a nine year old kid!  As an adult, now that I can reflect on the show with a more discerning eye, I can’t help but wonder if Mike and Carol Brady had their estate planning in order.   If not, you can’t help but marvel at the potential estate planning nightmare this blended family could pose.  Let’s say, for sake of discussion, Mike has a heart attack and dies shortly after eating a pastrami on rye.  The beneficiary of his 401(k) at the architecture firm is Carol (unless he forgot to change it from his first wife which opens up an entirely new conversation!).   So his $500,000 401(k) goes to Carol as well as $250,000 in stocks and bonds which was titled joint with rights of survivorship along with their lovely split level house valued at $250,000.  Mike had a $1,000,000 life insurance policy with Carol as the primary beneficiary as well. 

Carol now has:

$500,000 IRA
$250,000 stocks and bonds
$250,000 house
$1,000,000 proceeds of insurance

A few years go by and  Carol falls in love with and marries Sam the butcher.  They decide that Sam should move into her nice split level as Marsha, Greg, Peter and Jan have all moved out for college.   They further decide to title all assets joint with rights of survivorship and Carol makes Sam, her new love, the primary beneficiary of her IRA.  Then, two years later in a freak carnival accident, Carol dies.  What happens to all the assets?

You guessed it, everything goes to Sam.   What do the six kids receive?  Nothing!  Is Sam obligated to give the kids anything?  No.  Maybe he and the kids never got along which leaves him free to run off with Alice and the money and live happily ever after.

Mike had amassed $2,000,000 worth of assets (including insurance) hoping it would be there for Carol and the kids for the rest of their lives, and five years removed from his death, Sam has all the money and the kids have zilch.  (Zilch is a technical term and should only be used by a trained professional.)   With proper estate planning, there may still be $2,000,000+, possibly in trusts, for the six kids and that’s what Greg would call…groovy!

Regarding the blended family, what if Carole had left all the assets to her three girls upon her death?  What about Mike’s kids?  Again, Mike had worked hard to provide a good life for his boys and 5 years later, Marsha, Jan and Cindy, have all the money while the boys receive nothing.  Not quite what Mike would have wanted but his lack of planning resulted in him inadvertently disinheriting his three sons leaving Greg, Peter and Bobby feeling not so groovy.

The first example above applies to any family.  The six kids could have all been Mike and Carol’s but the scenario could play out the same.  The second is a challenge presented by blended families and requires more consideration in planning.

If your estate plan isn’t “groovy”, give me a call and we can discuss your situation in more detail. 

Below is our Market Update.

“Someone is sitting in the shade today because someone planted a tree a long time ago.”

Warren Buffett

Jeff Schriefer
Senior Wealth Advisor
Wealth Management
Bank of the Bluegrass & Trust Co.
215 Southland Dr
Lexington, KY 40503
859-233-8929 Office
859-252-0304 Fax

Market Update
May 8, 2017 


The Dow Jones Industrial Average reached another milestone Friday, settling at 21,006.94 after rising 0.32% on the week. Slightly better 5-day performances were posted by the Nasdaq Composite (+0.88% to 6,100.76) and the S&P 500 (+0.63 to 2,399.29). Small caps lost 0.25% for the week – the Russell 2000 closed at 1,397.00 Friday. During the past five market days, the CBOE VIX retreated 2.31% to 10.57.


Unemployment hit a 10-year low in April as payrolls swelled with 211,000 net new jobs, a rebound from the meager gains of March. The Department of Labor’s monthly report showed the headline jobless rate declining 0.1% to 4.4%; the U-6 rate measuring underemployment was at 8.6%, falling 0.3%. The latest consumer spending report from the Department of Commerce was less impressive. Personal spending was flat in March, with personal incomes up 0.2%.    


America’s factory sector grew at a slower rate last month than it did during March, while the country’s service sector picked up its pace of expansion. The Institute for Supply Management’s April purchasing manager index dipped to 54.8 from its previous 57.2 mark; ISM’s non-manufacturing PMI rose 2.3 points in April to 57.5.


As expected, the central bank left the benchmark interest rate in the 0.75-1.00% target range last week. The Federal Open Market Committee felt that the poor economic growth of the first quarter was likely “transitory,” and in its view, economic activity should “expand at a moderate pace” with “gradual” monetary policy adjustments. On May 5, Fed futures traders put the odds of a June rate hike at 79%.

While believed to be accurate and from sources deemed to be reliable, the presented information is general in nature.  It is not intended to provide, and should not be relied on for, accounting, investment, legal or tax advice.  Consult the appropriate professional advisor for more complete and current information.  Investors should consider their individual financial circumstances and the inherent risks of investing with their investment advisor. Services provided by Wealth Management at Bank of the Bluegrass & Trust Co.: Are not FDIC insured*Are not bank guaranteed*May lose value*Are not guaranteed by any state or government agency.

Share this post