Lesson 5 – How will you pay your Death Taxes?
After Lord Grantham bankrupted the Estate, he took on Matthew as a partner. Matthew essentially contributed money from his wealthy late wife to buy 50% of the estate. This split the Estate into two pieces. One half was owned by Lord Grantham, and the other half was owned outright by Matthew.
When Matthew suddenly died, a significant estate tax was due on the 50% that he owned at death. In the show, they casually mention Mary negotiating with the taxing authority to pay taxes back over several years to avoid having to sell real estate. While sometimes the United States IRS allows people to slowly pay back estate taxes, they charge considerable interest and penalties to do so. The common trend is to keep cash reserves or purchase insurance to pay the tax bill in full. This way you do not have to sell your castle in order to pay estate taxes.
This is an important consideration for many families I represent. While not many Americans own castles, there are many large family estates that have emotional significance. Allocating insurance to cover the taxes is the cheapest and usually least invasive way to ensure that your family’s estate will stay in the family for generations.
Lesson 6 – Only the Good Die Young Part Two.
Everyone needs a Will.
As we discussed previously, Sybil did not have an Estate Plan and like Sybil, Matthew did not have a comprehensive plan either. He did however have what is called a Holographic Will. A Holographic Will is a letter or document in your handwriting outlining your intentions if you were to pass away. Believe it or not, a Holographic Will without witnesses or a notary is admitted in many states as a valid Will. New York allows Holographic Wills, but Connecticut and Florida do not. However, I cannot speak for other states as I am not licensed in them.
Matthew was a lawyer after all, and he knew that executing a Holographic will –a letter outlining his intention to make a Will leaving everything to Mary – may serve as a stop gap before he formally prepared his Will. In this case, it saved the day and Matthew was able to leave his entire share of Downton Abbey, 50%, to Mary.
Lesson 7 – Disability Insurance –for the rich and the poor.
One of the more interesting, yet understated paradoxes of the show, is the parallels between Matthew Crawley and Mr. Bates’s disabilities. When Matthew Crawley is disabled, he is brought back into Downton and treated rather normally. Afterall, he is the disabled heir to the estate. On the other hand, Mr. Bate’s is seen with disdain by his colleagues and faces constant questioning by his employer.
Would his disability keep him from doing his job fully?
Today, we have a product called Disability Insurance. Disability Insurance pays you money when you are not able to work to your full capacity due to a disability. In Mr. Bate’s case, having this insurance would have allowed him to work less hours for less money and have his income supplemented by the policy. It would have helped lower resentment, and possibly would’ve made it easier for the Earl of Grantham to keep Mr. Bates on staff.
Alternatively, while it seemed Matthew was going to be very wealthy, the Estate was nearing bankruptcy. Luckily, however, Matthew was able to recover because of the extensive work he had done to save the Estate. If Matthew had not been working during his disability, Matthew would not have had the necessary income he needed to support his family,
or save the Estate.