3 retirement lessons from 'Downton Abbey'

Learn from the money mistakes made by characters in this elegant British TV drama.

By Money Staff Jan 6, 2014 3:43PM

This post comes from Glenn Ruffenach and Matthew Heimer at partner site MarketWatch.

MarketWatch on MSN MoneyIf you’re a fan of "Downton Abbey," the hit British drama that airs in the U.S. on PBS's "Masterpiece," you know that family finances and estate planning (or the lack thereof) play a central role in the series. (And if you haven't yet seen the end of Season 3 or the beginning of Season 4, you should also be warned that some spoilers are coming up shortly.)

These pecuniary themes have made the show something of a sensation among financial planners and lawyers, who see many of the same issues -- and problems -- in their clients' lives. And the first installment of season 4, which premiered Sunday, was unlikely to Cast Downton Abbey, Season 4 © PBS
disappoint this audience: During the episode's gloomy first hour, characters wrangled with the consequences of the fact that Matthew Crawley, heir to the Downton estate, has perished in a car accident without leaving a will.

For a recent article in the Wall Street Journal, columnist Kelly Greene spoke with several advisers about some of the biggest lessons that individuals and families can draw from "Downton Abbey." Indeed, the "whole plot is really about an enormous estate-planning problem," says Kenneth Brier, a lawyer in Needham, Mass.

The most obvious take-away: Diversify your holdings. (The head of the Crawley family, the Earl of Grantham, invests the bulk of his American wife's fortune in a single Canadian railway, which ends up filing for bankruptcy.) But let's assume you have already taken that step. Among the additional "Abbey" insights:

Sell the house: The Crawley family plots and schemes to keep control of their castle and sprawling estate. In real life, though, inheriting an old house often can be more trouble than it's worth.  Parents frequently think their adult children have an emotional attachment to a home -- when, in fact, those children often would prefer to sell the property and inherit the cash.

Use trusts to protect a family fortune: So-called dynasty trusts can help protect against bad management, creditors and divorce settlements, says Christine Finn, a lawyer at Marcum, a New York City accounting and advisory firm. In particular, such trusts can help prevent one person from blowing a family fortune. A professional trustee, for instance, likely would have been able to prevent the earl from plowing most of his family’s funds into a single, dubious venture.

Set up a medical directive: Characters in "Downton Abbey" seem to die at an alarming rate, which keeps the show entertaining, but also highlights the need for both a will and so-called advance medical directives. These are written instructions that specify what actions should be taken if you no longer are able to make medical decisions. It's also prudent to have a health-care proxy, which appoints someone to make such decisions. In short, the more people who know about your wishes, the better.

In "Downton Abbey," there "are an awful lot of secrets," says Mary Schmidt, an estate-planning attorney in Boston. "And secrets are detrimental to proper planning."

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Jan 6, 2014 5:26PM
Lesson from Dowton Abbey No. 1 -- Marry an heiress.
Jan 7, 2014 12:05AM
I think the author misunderstands the reasons the fictional Crawley family is so determined to hold on to Downton Abbey. It's not just an "old house." These stately old homes in England represent a cultural heritage that they, as Earls of Grantham, have been entrusted to preserve. In that era, the estate would be the most major employer in the shire and the economy of the entire area would be hugely dependent on maintaining it intact. It's undoubtedly a very hard concept for modern-day Americans to grasp, but it's not about vanity, greed or control for the characters in this story. It's about honor and duty.
Jan 7, 2014 1:57PM
Another lesson is not to be a know-it-all.  The Earl has consistently come across to me as someone who thinks he should shoulder broad responsibility but not do his homework to deserve it.  He thought he'd be put in charge of soldiers in WW1 and then was insulted by the ceremonial post he got.  He talked about Ponzi in America making people rich, his own "sure" investment and couldn't understand how it collapsed.  He thought he knew-it-all about managing his estate until he learned his cousin's similar estate was all but gone.  Then, after his son-in-law died he tried to grab 100% of the management power, having done nothing to improve his abilities.

As a scientist, it follows that as a young man I was greatly impressed by Socrates revelations in Plato's "The Apology."  The Oracle of Delphi said Socrates was the wisest man in the world, so Socrates went around to all the leading politicians, generals, businessmen, craftsmen, etc. to find a wiser one to prove her wrong.  The result was that he finally realized he was the wisest man because he was the only one who realized how little he knew!

I've been a successful investor, a few percent better than the market average, for over two decades, but right now I'm reading  Morningstar's Pat Dorsey's "The Five Rules for Successful Stock Investing" which makes the value investing approach of Graham-Buffett (asset value, durable competitive advantage, growth potential) more doable by the average person with lots of examples with calculations as well as a lot of qualitative information.

A little less mathematical, but worth a read are the Mary Buffett "Buffettology" and "The New Buffetology" books.  Even less mathematical but eye-opening is the great investor Peter Lynch's "One Up On Wall Street."  Of course, make sure you also study the ONE book Warren Buffett always has on his desk, Benjamin Graham's "The Intelligent Investor."  Don't read Graham's "Security Analysis" unless you have a ton of patience.

You should never think you're done Improving yourself!

Jan 7, 2014 10:46AM
Lesson No. 4 -- shut off the darn TV and start clipping out coupons.
Jan 6, 2014 10:03PM

I know who doesn't watch that show; voters for the elimination of government funding for PBS...

Jan 7, 2014 10:41AM
I don't take lessons from TV shows nor do I worship celebrities or athletes. I leave that to the idiot liberals. I'm too busy living a real life when I'm not here ridiculing those who voted in this sick sorry government and weak stupid lazy president we are stuck with.
Jan 6, 2014 4:33PM
With all the need in real life for attention to be paid to family finances and estate planning, who wishes to spend the time on their clock or in their mind to voyeur on some British confection's antics?
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