Every few months I take a cruise around Manhattan with a multibillionaire on his 300-foot “dingy.” I’m paid handsomely for my time. He even pays me a surcharge because I don’t like boats. We have lunch and discuss life, the markets, baseball, the weather, the whereabouts of all the baby pigeons and how many alligators are in the New York sewer system. You get the idea. About two years ago, he mentioned that he doesn’t have a will. With more than two decades in the financial services field serving the wealthy, that got my attention. I suggested he put together an estate plan, but he quickly moved onto another topic. Over the following two years I occasionally brought up the estate plan idea while enjoying the New York skyline and wonderful meals. One day he asked if the daughter he had with the Haitian maid should be included in the estate plan. That would be a good idea, I told him. Then, off he went on the chances of the Red Sox winning the World Series.
On our subsequent spin about the island he asked if his son by the au pair should be in his estate plan. Then he asked about the twins with his third cousin and his daughter with his second cousin once removed. After four years of circling Manhattan it dawned on me that he has a few “families” besides the one with his “loving wife and adoring children,” whom he insists are trying to have him assassinated. The day finally came when we met in a private room at a restaurant to talk about his estate plan. Over some sensational sushi, he concluded that after he is dead, his families can fight over his estate and kill each other. He’s sensitive and compassionate that way.
Another example is a woman who was worth about $400 million when I met her. She was married to a physician who earned about $300,000 annually. One day a few years ago she found her true love—her “one and only soul mate,” as she described him. He’s a mere 20 years younger then her but she insisted that they “connect.” After she explained it to me it was hard not to see how much they had in common. She loves him; he loves him. She has money; he wants her money. She wants a passionate love affair; he can fake it.
She wanted to leave her husband and run away with him. As she was my client, I explained to her how it would be a good idea to structure her financial life in a way that will permit her to share as little as possible and likely nothing at all with her soon-to-be ex-husband and ensure that her “one and only soul mate” doesn’t walk away with a sizable portion of her wealth. I painstakingly discussed how she could keep most if not all her fortune if she took certain proactive legal steps and didn’t act rashly. When she finished laughing a good 10 to 15 minutes later, she explained how her husband wouldn’t be a problem because he loves her and wants her to be happy even if it wasn’t with him.
Meanwhile, she said, her soul mate would do anything for her. There was no way she was going to listen to advice from me or anyone else. Today, about 18 months later, she’s worth $150 million. Between the divorce, the wild spending spree and paying off the boy toy, the money just went. She’s completely dumbfounded by the whole episode, which keeps me employed.
I see a few of these situations each year. Sound financial judgment easily succumbs to personal preferences and, often, an unchecked libido. This doesn’t happen just with the very rich—it’s the result of a basic human character flaw. It’s just that among the very rich, it can prove highly entertaining.
Friday, July 3, 2009
Lifestyles of the Rich and Anonymous
From Russ Alan Prince's column "Learning to Say N.E.X.T." in the May/June issue of Private Wealth: