The Old Money Book

OMG and contributor “Mary Louise Case” (not her real name, for those of you who’ve inquired) has more on her mind.

Enjoy!

The luck of the draw

An aspect of Old Money that people often cite with wonder is the ever-present luck which Old Money enjoys. From the outside looking in, it appears there is some weird magic which steamrolls any tedious issue or temporary setback out of the way. Well, we have a so-called ‘dirty little secret’.

There’s a famous anecdote about an elderly fish swimming along one morning and asking two teenaged fish, “How’s the water today, boys?” The young fish respond with confusion, “What is water?”

While growing up my ‘water’ was in being surrounded by attorneys related to me. These lawyers ran their own firms, worked for the federal government, worked in corporate law as general counsel, worked as senior partners for national law firms, and some worked for specific groups that lobby the U.S. government.  When you grow up hearing about how the law works and how people who are outside this loop make terrible mistakes costing upwards of millions of dollars, you come to your senses quickly, even as a 12-year-old.

I’ve offered advice to college friends who have kids in their mid-20s in this regard. “Have these kids skip a vacation this year and sit down with a family attorney,” I suggest. I ask them to get their kids to discuss their current apartment lease, show this attorney their last two years of tax returns, ask about an upcoming car purchase, review auto insurance, and get to know their lawyer and what he/ she can help explain about the grown-up world.

I recommend that by the age of 30, this same adult child of my friend should have roughly a $2k retainer with their lawyer’s firm (check with the attorney first). This will help pay for ongoing legal advice for the types of issues they will face as they get married, as they purchase their first home, among other things.

Further meetings with counsel could cover any issues regarding employment contracts, family trusts, investment dividend taxation, business separation agreements, and certainly any “business” people in their community who approach these young adults about a hot(!) investment opportunity “they really shouldn’t pass up.” (wink, nod)

Having a professional advocate in the legal field — to my way of thinking — is one of the safest bets you can make to preserve your wealth, to understand contract law while you’re making a major purchase, and even to understand the changes taking place in your city which may affect your future tax situation. Successful attorneys circulate with each other socially through professional events, and many are published in legal journals as well as provide free, i.e., pro bono, work to charities in your same town or village.

Not only are these lawyers connected to the contractual goings-on around your city, but each attorney becomes an interesting database for one another when they tell stories, privately, of luck or disaster visited on their own clients. Those stories may get back to you as a lesson learned by your attorney who now can give you legal advice far more valuable than what is merely in their law library and the dozens of court decisions they need to keep up with monthly. The value of a brilliant lawyer working for you will make you believe you can mint luck from your home office forever.

Of course with each zero-year birthday I tell my friends to make sure their kids up their retainer at their lawyer’s office. On a 40^th birthday make it $4k, and at 50 they should set aside around $8,000 for the tax issues regarding retirement, second-home purchases, probate, insurance policies, health care instructions in case of an accident, taxes involved in the sale of assets and on and on.  Again, check with your attorney on their hourly rates and retainer requirements. However, the idea is always to set aside this money for legal services so there is no excuse for skipping your lawyer’s review of your financial situation.

The attorney provides an itemized billing of services offered which are deducted from the amount you have on retainer and you generally pay on receipt of further billings. Again, the reason for the initial retainer is to force the discipline of keeping in contact with an advocate of your best legal interests based on what you’ve acquired and the laws in place regulating the legal aspects of continued ownership (and tax obligations!) of same.

THIS is how very Old Money hangs on to what they’ve acquired: risks are minimized via legal understanding of the framework of new financial arrangements and informed decisions are made, for instance, when a married couple decides what to do with a sudden windfall or what funds to draw on for their children’s tuition.

I joke with friends that a good attorney is the world’s best cure for insomnia; he or she will help you sleep at night no matter what issues you face in receiving a tax bill or in turning down the latest hot investment scam – er, opportunity.

Those who see that you haven’t gone through a financial reversal or haven’t had a business seized or a vacation property slapped with a lien will call you “lucky” when you’re just enjoying the water.

• “Mary Louise Case”