Lesson Two -The Good Die Young
Remember, I warned you about spoilers. As viewers already know, Lady Sybil passed during childbirth in her early 20s. At the time she fell ill, she did not have an Estate Plan which left a few interesting things to consider.
- Her wealth. If Lady Sybil had any, it would pass via English law. The common law traditionally splits the Estate between the Husband and children. In having a Will, Lady Sybil would be able to ensure that her daughter would not inherit money before her first birthday.
- Her health. While Lady Sybil was ill, she was not able to advocate for her own care. She did not have a Health Care Power of Attorney. A Health Care Power of Attorney is a document that designates who can speak to the doctor on one’s behalf. Since she did not have a clear directive explaining her wishes, her father, mother, and husband each had differing views on what was best for her. This predicament ultimately caused significant family strife which arguably led to Lady Sybil’s misdiagnosis and resulting death.
- You are never too young to plan for a Health Care Power of Attorney. It is important to not only consider the impact it will have own your own treatment, but it is also important to consider the impact the documents will have in preventing your family from incurring additional stress, engaging in quarrels and experiencing resentment towards one another.
Lesson Three – Diversify your trust assets.
An important, yet often ignored rule of law, is that generally speaking all trust assets must be diversified, or the Trustee will be in breach of his duty to the trust. In Downton Abby, the Earl of Grantham found a too-good-to-be-true Railroad investment that he moved a majority of the Estate’s wealth into despite his adviser’s advice. When the investment went bad, he had no assets he could use to soften the blow. For the Earl of Grantham, ignoring this basic rule of, ‘not putting all your eggs in one basket,’ killed an Estate that had been running for generations (had Matthew not come to the rescue).
Lesson Four – Don’t always allow family to make financial decisions
As previously discussed, the Earl of Grantham ignored his adviser’s advice! As heirs and non-professionals often do, he thought he knew better than the professional investment advisers. While in some cases a family member wins out, you should look at improperly managed investments as gambling. Sometimes you win, sometimes you lose. For this reason, it often makes sense to designate professional accountants, advisers, attorneys and trust companies to serve as managers of Trust funds. Making those designations ensures that any and all basic minimum standards are followed.
Afraid to give the keys to your castle to a professional?
Consider having a professional serve as co-trustee with a family member. Then you get the best of both worlds –comfort and protection.