INSIGHTS

ALTHOUGH IT DOESN’T invoke sympathy, it is, at the same time, an interesting snare that catches some of the big rich. The state of having more than one needs, rather than bringing comfort and confidence, sometimes leads to another condition: that of never having more than one wants. For that particular condition, many people never find a cure. Here’s one such Dallas story that might have driven writer John O’Hara, a steady-eyed observer of the rich, to reach for his bottle of rye.

A few months ago, a local heiress (we’ll call her Ms. Jane Doe) and her clever lawyers decided, alas, that personal bankruptcy was the best way for her to alleviate her financial difficulties. Before your tears begin to flow, realize that there’s yet another way that the rich are different from you and me: They can rig it so that they don’t have to pay as they go; in fact, sometimes they don’t have to pay at all. Ms. Doe has something that America’s Founding Fathers never considered when they were formulating the Bill of Rights. It’s called a “Spendthrift Trust.” First, perhaps we should offer some background.

Ms. Doe likes clothes and furs and jewelry that glitters. While other women were holding down two jobs and, out of some anachronistic instinct, raising their children to honor obligations, Ms. Doe was doing her best to take her well-deserved place among shopping’s royalty. Through dint of dawn-to-dusk spending, she turned herself into Yves St. Laurent’s single best customer-not in the Park Cities or Dallas, but in the entire United States. Ms. Doe was not unknown at any of the city’s other pricey shops, either. During one of her marriages, she kept one room-a room, not a closet-just for her furs. Ms. Doe soon discovered that too much was not enough for her.

Ms. Doe had a friend, a woman of taste, who had worked for what she had achieved in the store she had built. In the bankruptcy proceedings, Ms. Doe left her friend with unpaid bills that extended well into five figures. The fact that a loss of this magnitude would severely hurt her friend’s business saddened Ms. Doe, but not to the degree that she felt any obligation to return any of the goods, although many of them were still unused. According to Ms. Doe’s way of thinking, she had bought them, and even though she hadn’t paid for them.. .well, that was just a small technicality. The warm state of bankruptcy gave Ms. Doe’s upscale shoplifting a special status.

Ms. Doe’s decision to seek the safety of bankruptcy was not what you could call spontaneous; it was her last desperate lunge for a lifesaver. When Ms. Doe’s creditors tried to get to her assets, they found that she had discovered the joys of leasing. That sporty little two-seat Mercedes you see her driving around town is leased. And her lovely antique furniture? She leases that from her mother. Her lovely house at a very proper address? Leased. Won’t the people who lease to her get stung? No, because Ms. Doe pays them. If she’s bankrupt, how does she do that? Back to the Spendthrift Trust. This pays Ms. Doe more than $150,000 per year from her inheritance capital and cannot be assigned by Ms. Doe. Poor Ms. Doe can’t get to her capital, but look on the bright side: Neither can her creditors. Ms. Doe didn’t make good grades in school; she didn’t see the point. But while her chums were doing their declensions and memorizing their multiplication tables, she was learning how to make the system work for her. And for that, enraged as you may be, you have to give her an “A.”

The comfort, if there is any to be drawn from this gloomy tale, is that there are many more people of means who don’t abuse their wealth. They understand better than most of us that having it is not the same thing as making it.

I know one man who has made an enormous amount of money and is recognized as one of the leaders in an industry that is as fast-moving as it is unforgiving. Yes, he had paid some high prices, a fact of which he did not need to be reminded. But this man was intelligent enough to always keep a certain part of himself (maybe the most important part) removed and inviolate from his wealth. This was the part that kept him coming back to the stories of Isaac Bashevis Singer; it was also the part that managed to keep his sense of wonder intact. His financial advisors were always trying to get him to pay more attention to his money, and, begrudgingly, he did.

What was his first move? Oil? Land?Gold? He went for none of the things hisfinancial advisors understood. He investedin friendship. He helped a friend who wasin his 60s go into business on his own. Heexplained this investment as wanting tounleash his friend’s dream. That’s using thesystem, too. But Ms. Doe wouldn’t understand his example.