Revelation Blues Pt. 04

"That's true Mary. I no longer have an income. I managed to deposit the little money I got from work and from the sale of the cars in a fund for Dean so that I could contribute to his support. I am living now on a day by day basis. Dad will help me financially when needed." He ignored her second question.

"Will he help pay my alimony?"

"Mary! For goodness sake," Scott shouted, unable to contain himself, "How could you ask such a stupid question? First of all, the alimony was to be paid from my income, salary and bonus that is, nothing else. Dad will send me enough money to get by, he is not paying me a salary, and the money he sends does not qualify under the terms of our divorce. He probably would stop sending money if he knew I was giving you some of it. Let me tell you this, Mary. You took all the money, our money, after our divorce, I got nothing but pain and sadness after what you did. So use that money Mary, and use it well."

"I can't Scott. I opened a couple of CDs and deposited all the money. Don said that would be best till I figure out what I'll be doing."

"Awesome! Since Don is now your financial adviser, as well, I suggest you ask him what to do."

"But how will I live without money? I have expenses... "

"The same way as I will, I guess," Scott cut her off, "You can't rely on the generosity of your family, but I doubt that even if they had the means they would be inclined to help you. You can find a job, but that is so unlike you. Unless Aldo decides to pay you for whatever services you are rendering. Have Don or Fiona help you. I hope it wasn't only sex that drew them to you! My best advice is to start looking for a new husband, as stupid as your ex had been, so that he can maintain your lifestyle. That disqualifies Don, I guess, he has no money and he is already married."

"Not for long, Carla is divorcing him."

"How come? I thought she relied on him to keep her business." He was inwardly smiling.

"I have no idea. I think she is also selling the boutique."

"Good for her!" Scott's plan seemed to have worked. He will call Carla later and get an update.

"What about Dean?" She asked, finally. Scott was waiting for this one.

"What about Dean?" He retorted.

"How will I be able to look after him without money?"

"Why didn't you think of Dean before you started fucking around? It's too late now I guess. Anyway, his school is paid off and I told you that you will get monthly payments till the funds run out. After that I will ask my parents to help in any way they can. They love Dean and will do anything they can for him, but let me tell you this Mary, if they ever had the slightest doubt that the money wasn't spent on Dean, all of it, they will stop paying it. If you have issues with that then just check with your lawyer."

Scott wanted to push her buttons, shock her system in a way, and have her confront some of the basic realities of life. Nothing was free and nothing was forever. He also wanted her to know that she may be in for a long haul. He wasn't kidding himself either about her use of the money, but he had his plan. He didn't want to play all his cards at once. Somehow he couldn't resist saying what came out next.

"Mary, if you can't afford to look after him, you can always agree to have him come live with me. I may not have the money to look after him but my parents will help me. You will also have more time to spend with Don, Fiona, or Aldo and the others that will surely follow."

Mary remained silent.

"Anyway, have a chat with your lawyer if you needed some 'independent' advice. Unless of course you prefer Don's advice."

"Yes Scott." She sounded defeated. Maybe that was just wishful thinking on Scott's part.

"Good. I will come over Saturday to pick up Dean."

The conversation ended shortly thereafter.

* * *

Mary called her lawyer the minute her conversation with Scott ended. She was seriously worried. They met the following day at her lawyer's office. A crisis meeting of some sort. Her lawyer explored the various options available to Mary.

They needed to investigate and run some basic checks as a first step. It would be easy to verify Scott's claims. They would check with his former employer, check his new 'residence', his finances, and so on.

If they found that Scott had another source of income that he failed to declare they would have to go back to court to amend the terms of the divorce, particularly the limitation regarding alimony being paid only from his salary. That would take time.

Legally they couldn't lay claim to money sent to him by his parents.

They could engage a procedure to access his retirement fund in the United Kingdom. This was not within their jurisdiction and the international legal process could take years. They should have obtained more information about Scott's overseas retirement fund before accepting the settlement. Too late now.

Short of that, there was no way they could obtain anything from Scott while he was jobless.

Mary's lawyer was not a generous soul, she made clear what her fees would be for her services.

At her lawyer's suggestion, Mary agreed to the investigation part. There is a cost associated but at least they could verify Scott's claims and document the situation officially. Considering the estimated cost of the other options, and the time it would take to address them and resolve them, they may not be worth the investment.

Mary had to close the smaller of the two CDs to pay for her lawyer's fees, her upcoming rent, and her ongoing expenses.

* * *

The day following his chat with Mary, Scott called Carla.

"How is it going?" he inquired after greeting her, "I hear you are divorcing?"

"It's true Scott. I was fed up with that asshole and thanks to this new business opportunity I am able to free myself from him, his scheming, his cheating, and his lies."

"How did this unfold?"

"Well, his behavior hasn't changed. He doesn't tell me much but now I am more aware of things. I know he is still seeing Mary although their relationship hasn't been the same since Aldo is in the picture. He still lies to me but I don't even care. I've been focusing on the new business. I thought about what you told me last time, he could leave me one day and lay claim to all the good work I would be putting in the new business. I saw that clearly when we talked about the boutique. So I went to see my lawyer and started the divorce proceedings."

"What are you doing about the boutique?"

"That issue was much more dramatic to deal with but it's resolved now. After I told him that I wanted him to transfer the business in my name, he thought about it for a couple of days, he came back and told me that he wanted his name to be included in the ownership documents. I refused. The bank condition was clear, I had to have the boutique in my name to get the rescue money. He said he won't transfer it to me. So I threatened him with divorce and suing him for theft. He said there is no way he would transfer or sell the business and that if I didn't like it he would get another person to run the boutique. That was just about all I could take. The asshole treated me like a dumb-ass shop attendant. I didn't say a word to him for the rest of the week."

Carla paused to gather her thoughts.

"As I said, I thought a lot about what you told me last time we spoke. What he told me that day, dismissing me like a dirty rag, was just what I needed to go for his jugular. I went the next day to see my lawyer and started two proceedings, one for divorce and one for theft and embezzlement. When Don saw the papers he literally freaked out. I told him that the business was just about bankrupt thanks to him and that I had the means of proving it. As long as it was in his name I wasn't going to lift a finger to save it. After a long and horrible discussion I told him that he had two options. He could transfer the business in my name as part of a divorce settlement or, if he preferred, still get divorced and go to jail. In exchange for signing the divorce papers he could keep the house and I'll give him 50 per cent of the current estimated value of the boutique."

"How did he react?"

"He wasn't a happy bunny, to say the least. He huffed and puffed but finally agreed to my proposal. He knew that I was so fed up that I was ready to forget the boutique and let him deal with the bankruptcy and send him to jail."

"I am sorry to say so Carla, but I think you did the right thing." Scott was not sorry at all, this was exactly what he was expecting would happen. He didn't expect her to salvage the boutique but it seems that Carla was very attached to it and had handled the situation better than he hoped. He didn't want Don to go to jail though, that would be too good. Free lodging, free meals, a different form of sex but one he suspected Don could eventually enjoy. He wanted Don to suffer, no lodging, no food, and above all no sex.

"It had to happen sooner or later Scott, I know that now. You simply opened my eyes. It's better to do it now and start a fresh, new life. Anyway, he signed yesterday the divorce paper and the settlement and I dropped the other proceeding. We are getting an independent valuation for the business, I need it anyway for the new company, and he will get 50 percent of whatever it's worth. It's in the divorce settlement now. Because of the outstanding debts I don't expect him to get as much as he thinks. Most likely he will get 50 percent of the debt. He signed the papers and that's all that matters now."

"Why did you leave him the house?"

"It's heavily mortgaged, so no equity, we were struggling to pay the mortgage anyway. Now it has more bad memories than good ones. Let him figure out how to deal with the mortgage without me supporting him. My new business partner surprised me by offering to include in the deal housing and car allowances, as company expenses. So I'll be renting a new condo for me and my daughter."

They discussed Carla's new business interests and she informed Scott that she believes it would be probably worth opening another boutique as soon as the sale of the current one was concluded. She would have to talk to her partner company about acquiring a new location.

Scott didn't say much. He just noted what Carla told him and they ended their conversation with the promise to stay in touch.

Chapter 19 -- Safety Net

When Scott was born his parents opened a savings account in his name and deposited a small amount each month, increasing that amount annually. It was supposed to be a surprise gift for his eighteenth birthday. They had done the same for his older brother and sister, so when Scott became aware of that fact he guessed that they've done the same for him. In his last year of high school, Scott's parents also opened another account where they used to deposit his weekly allowance. Not surprising really when one knew that both his parents were doing well in the banking business and wanted their son to understand the value of money and how to manage it.

When Scott reached his eighteenth birthday, he was 'officially' informed about the savings account and his father told him that he now had full control over his savings and transaction accounts. With accrued interests, special deposits made on his birthdays, and gifts from grandparents, the balance was close to twelve thousand British pounds. For an eighteen years old just out of high school it was a fortune. When Scott thought about that several years later, he realized that this amount represented the annual income of a working adult in the early 1980s. Even for such an adult, that was a lot of money!

For various reasons, Scott didn't touch his savings. His parents decided to let him make his own decisions when it came to using that money and he didn't want to disappoint them. He wanted to buy a sport car but then he thought he would do so after finishing university. He figured he could use the money later as capital to start a business or as a deposit for a house. There were just too many things he could do with that money. He chose to wait.

While at university in London, Scott joined a student investment club which were in fashion at the time. That was surprising in a way because he didn't have a speculative-mind nor did he have any interest in share trading. The fact was that some of his closest friends at university had joined that club, he just tagged along. It seemed like a fun thing to do with friends at the time. When he started to understand the market dynamics, he was hooked. In addition to the investment club, Scott opened a share trading account with his bank back home. His father helped him with that. At that time, there was no Internet and no browsers, trading was quite an experience.

Scott wasn't a compulsive trader, when he felt that a business had potential or a company had a promising future, he managed to buy some shares. He limited his investments to the businesses he was familiar with or those he understood the business model, such as IT companies and major engineering corporations.

After graduating, Scott was enjoying a quiet summer vacation in the English Channel, with his parents, before starting the quest for his first full time job. He thought again of his savings and the sport car he hoped to buy. His investments at the time, although very small in comparison, were doing well, very well indeed. His savings account started by his parents on the other hand hadn't grown much, proportionally to his investments that is. His savings account, with the addition of a few deposits and the accrued interest, amounted to less than fourteen thousand British pounds.

Scott wasn't a financial wizard but he could handle simple logic and simple maths. The little he had invested in shares, less than two thousand pounds in less than three years, most of it from when he worked summer jobs or part-time, had nearly tripled in value while the 'huge' amount he had in savings had barely moved in comparison. The sport car faded again in the back of his mind and was replaced by the very dominant thought of making his savings money work better for him.

It took Scott a few days to transfer most of his savings to his share trading account, then instruct his account manager at the bank to buy him shares in companies he either had invested in already or new ones that emerged since then. He now had a modest portfolio of shares that he hoped would grow and allow him to buy an even better sport car.

When Scott started working, his monthly salary was deposited in a new bank account in London. Occasionally, when he felt he had a little more than what he needed for his ongoing expenses and entertainment, he would transfer the excess to his trading account back home and buy more shares.

A couple of months before being offered the assignment to California, and thanks to a fortuitous encounter Scott had with one of his father's friends, who also happened to be the family solicitor, he learned about Trusts. Initially he was more curious than needful, but by the end of their chat he was convinced of the need to establish such a Trust.

The solicitor helped with the set up of a Discretionary Trust and the creation of a holding company that would act as the trustee. Scott asked his parents if they would be willing to to be listed as beneficiaries of the Trust. Of course they both agreed. He was the sole owner of the the trustee company and its sole director and secretary. In the unfortunate event where something would happen to him, his parents could easily take it over. There was no need for a will.

At his solicitor's advice, Scott gave his father a full and perpetual power of attorney. His solicitor told him that this would allow his father to act on his behalf should an emergency or need arise. With the help of the solicitor and his accountant, Scott transferred all his worldly wealth, his savings account and his share trading account, into the trustee company.

* * *

When Scott was offered the assignment to California, and after some research, he accepted on the condition that his stock options and pension be dealt with separately.

He asked for his pension contributions to be paid by his employer into a self managed personal pension plan set up in the Channel Islands. His argument to his management was that, regardless of how his career progresses, and wherever he is assigned, this arrangement would save everyone all sorts of administrative complications later on.

To his surprise his company readily agreed. The pension plan was fairly simple to set up and Scott thought it would give him better control over his pension management and investments. Although separate from his Discretionary Trust, The pension plan was managed by his Trust's holding company. It was also his second second safety net. He had full control of how his retirement fund was managed.

Whenever he could exercise his options on the incentive stock his company offered him from time to time, he would contact his accountant and ask him to perform the transaction on his behalf. These were also deposited eventually into his pension plan.

The dissociation of the stock options and pension from his contract in the US proved now to be a very smart move.

* * *

When Scott moved to the US, his salary and bonuses were paid to a US bank account. Due to his move and to the time spent on his new project, he forgot, for a short while, about his investments. He was totally focused on his new job. Once well settled in his new environment, he started dedicating a small part of his time to keeping track of his investments. He kept the habit of transferring money to his company in the Channel Islands and investing in more shares.

After marrying Mary, he consulted with a financial adviser in California, his accountant in the Channel Islands, and his financial adviser in London. After considering his options, weighing all the financial, taxation, and administrative implications, he decided not to change any of the existing arrangements to the Discretionary Trust, the Holding Company, or the Personal Pension Plan. He instructed his solicitor to draw a will designating Mary, and later added Dean, as beneficiaries. Should anything happens to him they would inherit everything.

The only thing that changed after he married Mary was that he stopped transferring money to his company back home. He now spent whatever extra money he made on getting his family the nicer things in life, and from time to time on making Mary that much happier, like buying her a new car or offering her a nice ring for their wedding anniversary.

Scott was a gifted but also a disciplined investor. Many invested like gamblers playing Black Jack. He invested for the long term. In Scott's mind what started, and to some extent remained, a hobby became a real-life game of Monopoly. Whenever he heard of or discovered a new or promising company and decided he wanted to invest in, he would immediately instruct his bank to buy shares in this company.

Imagine investing in Microsoft in 1990 selling some of the shares in 2000 and buying in eBay then selling most of the eBay shares in 2005 and buying Google shares. Imagine what buying Oracle shares in 1995 and selling them in 2001 or buying Boeing shares in 1995 and selling them in 2008 would have represented.

When companies like PayPal and e-Trade saw the light, Scott was always one of the early adopters. By then he had accounts in various currencies and shares in expanding and developing markets.

It became his secret hobby, one he practiced when on business trips but seldom when he was at home. But then Scott traveled a lot!

Maybe that is why he never mentioned his 'hobby' to anyone, not even to Mary. He never felt comfortable talking about it. He nearly told Martin when they met in San Francisco, that was Martin's line of business after all, but then he changed his mind. He never wanted to convey the image of being a 'rich guy', it just wasn't him. He didn't want to be put under pressure by comments like 'why the hell are you working when you have that kind of money'. The only ones that knew about the Trust and the holding company were his parents. His brother and sister also knew but were not directly involved. They both had their own 'hobbies' anyway.