Money Lessons From ‘Downton Abbey’

Money Lessons From ‘Downton Abbey’

Kelly Greene of The Wall Street Journal wrote an entertaining piece on the money lessons to be found in the popular show, “Downton Abbey”. The show has drawn a lot of interest in the U.S. with 8.2 million viewers tuning in for the Feb. 17 Season Three finale.  Greene explains the program’s popularity by suggesting that it “resonates with Americans today in part because the family dynamics it portrays are timeless”.

Downton Abbey centers on a British aristocrat, Robert Crawley, the Earl of Grantham, who has three daughters but no sons to whom he can leave his estate, as required under British property rules at the time. The earl’s male cousin and the cousin’s son both die on the Titanic. That leaves as the next possible heir a distant relative who—gasp!—works for a living, albeit as a lawyer.

In between all the plotting and back-stabbing, the characters blunder into a broad array of financial- and estate-planning disasters, from bad investments and messy trusts to poor business-succession plans and power struggles following health crises.

Many of us here are avid fans of the show and enjoyed Greene’s creative approach to using this British soap opera to highlight what to do and what not to do when crafting and managing a financial plan. WARNING: the rest of this article contains spoilers if you haven’t finished Season Three!

The most obvious take-away from “Downton Abbey” is to diversify investments, a lesson the earl learns after squandering much of his American wife’s fortune on an investment in a Canadian railway filing for bankruptcy. Left with almost nothing, the family quietly makes plans to sell the ancestral home, lay off staff and move to a smaller property—until they are saved at the last minute by yet another inheritance.

“If there is anyone out there who has not made proper provision for their family, and ‘Downton’ is a nudge for them to do so, then hurrah,” says Julian Fellowes, the series’ creator and executive producer.

Kelly goes on to offer five more key lessons including:

Sell the house. In the program, the ancestral home is central to the Crawley family’s lives and status—their residence, social life and business rolled into one.

But in modern times, inheriting an old house often is more trouble than it’s worth.

Many parents overestimate a property’s emotional importance to their heirs. And the heirs sometimes feel a sense of duty to keep the house, even if it isn’t worth the expense.

Spell out control and ownership when passing the baton. The Earl of Grantham presides over Downton Abbey with his family, but the blown investment has left them broke. Matthew Crawley, the earl’s third cousin once removed and the closest remaining male heir, winds up falling in love with and marrying the earl’s oldest daughter, Mary.

After Matthew inherits a pile of money from his former fiancée’s family and invests it in Downton Abbey, the earl invites Matthew to join the family business. But when Matthew starts digging into the books, he finds big financial problems, and the estate’s longtime overseer resigns suddenly.

There are ways to ease such problems when bringing the next generation into the family business. The first step: Make sure everyone involved is clear on who has voting rights, veto rights and the power to fire, along with the size of each person’s equity stake in the business, Mr. Forster advises.

Make a will before giving birth. Matthew Crawley’s death points to other financial-planning issues affecting families.

Matthew should have had a business agreement in place spelling out what would happen to his wife and any children if he died, along with an updated will, says Mary Schmidt, an estate-planning attorney in Boston. Instead, he essentially made a gift to the earl—not the wisest move for a character who also is a lawyer by training, she says.

Most expectant couples should have a series of documents in place, Ms. Schmidt says. Among them: wills, trusts for their spouses and children, and a power of attorney allowing their spouse to handle their business affairs if they become incapacitated, she says.

Set up a medical directive. A few episodes before Matthew Crawley’s death, Sybil, the beloved youngest daughter, dies from childbirth complications. As she falls ill, the family struggles to guess what her wishes would be: to be moved to the hospital to seek treatment that might save her but risk the child? To baptize the baby girl as a Catholic, like her father, or an Anglican, like her mother?

Ms. Finn, of Marcum, recommends spelling out such wishes through a will and an “advance medical directive”—a set of written instructions that specify what actions should be taken if you no longer are able to make medical decisions, along with a health-care proxy appointing someone to make those decisions on your behalf. Doing so “saves the family having to wonder, and it saves a lot of tension,” she says.

You can read the Wall Street Journal article if you’re a digital subscriber to the Journal