Woody Allen fans accustomed to the psychoanalytic themes of his films can also learn a lot about personal finance from the latest. "Blue Jasmine," which opens nationwide today, depicts the psychological unraveling of Jasmine Francis (played by Cate Blanchett) after her husband Hal, a Madoff-style money man (Alec Baldwin) goes to jail for his misdeeds and hangs himself there.
When we first meet Jasmine she has endured the indignities of moving from the Upper East Side of Manhattan to Brooklyn, sold furs and jewelry to pay the legal fees and suffered a nervous breakdown. Six different meds, hospitalization and shock therapy haven't stopped her from talking to herself in public and staring off into space as she flashes back to events that have led to her mental and financial collapse.
She turns up on the doorstep of the honky-tonk San Francisco walk-up where her sister Ginger (Sally Hawkins), a supermarket checker with two young kids and a boyfriend who's an auto mechanic (Bobby Cannavale), welcomes her with surprising diplomacy. Ginger and her ex-hubby Augie (Andrew Dice Clay) invested a $200,000 lottery win with Hal, and lost every penny through his Ponzi scheme. Augie is unforgiving, but Ginger would rather blame Hal. "He was a crook — not her," she says. "What the hell does she know about finance?"
Not much, it seems. As viewers we root for Jasmine's emotional recovery, even as the evidence mounts that she is beyond repair – a tragic character reminiscent of Blanche Dubois in Tennessee Williams’ classic play, “A Streetcar Named Desire.” But around the water cooler at FORBES we’re also analyzing the mess she made of her finances. Deborah Markson-Katz, our copy chief, came up with the headline above. Another colleague, Richard Hyfler, put it succinctly: “Jasmine needs a good shrink, but some financial planning wouldn't hurt either.” Here are lessons that emerge.
1. Don't quit college to get married. In a holdover from generations earlier Jasmine, who majored in anthropology, leaves Boston University during her last year there to marry Hal. He is nine years older, has been around and sweeps her off her feet when they meet at a party. As his wife, she’s the lady who lunches, shops in designer boutiques, takes Pilates classes and raises funds for the Central Park Conservancy. She never even learns to use a computer.
All of this leaves her completely unmarketable when she suddenly needs to earn a living. (See my post, “Why Opt-Out Moms Can’t Catch Up.”) Her first job after things fall apart is in a shoe store where she winds up measuring the feet of women who she used to host at parties. While Jasmine drowns her sorrow in vodka and pills, Ginger helps her plot an alternative, though absurd, career path: take a computer course so she can get the skills she needs to take an online course to become a decorator. Meanwhile she gets a day job as a receptionist in the office of a nerdy dentist (Michael Stuhlbarg).
2. Stand up to sexual harassment. The dentist has the hots for Jasmine, who doesn’t want to sleep with the boss in order to hang onto her job. She accepts his invitation to go out for drink, but heads him off with a lie that she has a boyfriend. On another occasion, when he makes a pass at the office, she slugs him and quits. “You can sue him, you know – that’s harassment,” a friend from computer class advises her. But Jasmine refuses. “I don’t ever want to see another courtroom,” she mumbles. (For information about when you can quit and still get unemployment benefits, click here.)
3. Get your own lawyer. Jasmine’s clearly had her fill of lawyers, too, but flashbacks to her earlier life suggest she may not have brought them in early enough. There is no mention of a prenuptial agreement, but if there ever was one, Jasmine would have been wise to have her own lawyer representing her in negotiations. In any event, since Hal had a son by a previous marriage, the couple should have had separate lawyers draw up their wills. (See “Estate Planning For Couples: Should It Be A Solo Or A Duet?”) In the process, an ultra-diligent lawyer in the post-Madoff era might have discovered Hal’s wrongdoing early on.
And certainly once there was any cause for suspicion, Jasmine should have skipped Pilates class or bowed out of lunch with the girls now and then to see the best white-collar defense lawyer her wads of money could buy. She knows that her husband’s partner quit their business, Global Innovations, because as Jasmine puts it delicately to Hal, “he’s not comfortable with some of the innovations from a business standpoint.”
Hal punts. “Let me deal with it,” he says, adding, “Is there anything you want that you don’t have?” Their lavish lifestyle includes a Park Avenue apartment, multiple country homes and a chauffeur-driven limousine. Ultimately, they lose all of it.
For a slideshow of the clothes Cate Blanchett wore in the role of Jasmine, click here.
4. Jewelry is not an investment. Hal showers Jasmine with gifts of jewelry, perhaps to distract her from his dalliances with other women, to assuage his guilt or both. And when the going gets tough, she has a hard time liquidating these assets. "I sold what jewels and furs I could hide from Uncle Sam,” she tells Ginger pitifully – calling into question her own ethical standards. But as much as this stuff costs new, "when you're forced to sell, you can't give it away," she says. (For practical advice about how to get the most for your baubles, see “Four Tips for Selling Your Diamond Jewelry.”)
5. Don’t have designer handbags monogrammed. This reduces their resale value, as Jasmine discovers when she tries to sell her four-piece matched set of Louis Vuitton luggage. "With my initials on it, who would want it?" she tells Ginger, explaining why it has accompanied her to the San Francisco walk-up.
“She is absolutely correct – a monogram can decrease the value of a piece by 70% to 90%,” says Matthew Rubinger, director of luxury accessories at Heritage Auctions in New York. And that (presumably unmonogrammed) Hermès gold Birkin with gold hardware that Jasmine always has slung over her arm? In good condition, as hers appears to be, it would fetch $7,000 to $9,000 at auction, he says.
She’s got a glamorous wardrobe too. Even after her comedown, Jasmine still dresses in a white Chanel jacket trimmed in blanket stitching (a security blanket?), Chanel chains and Roger Vivier shoes. Selling at least some of these items would have given her enough money to rent her own apartment instead of crashing with her sister. (See “How To Turn Your Closet Into An eBay Gold Mine.”) Ginger, too, has a luxury item more commonly associated with the 1%: a garish yellow Fendi baguette bag that Jasmine treated her to during better days.
6. Protect your assets. As the downscale but articulate Ginger observes, Hal “lived like a big shot on other people’s money.” Jasmine has been the beneficiary. This is the kind of stuff that get lawyers' antennae up. Through trusts and other mechanisms they can help protect the assets of people whose work could generate lawsuits: doctors, real estate developers and directors of public companies, for example. But asset protection, as it’s called, does not inoculate people who commit crimes. And lawyers who take on such matters could get embroiled in years of litigation themselves. Knowing that Jasmine and Hal’s wealth was the product of fraud, “I wouldn’t have touched that case,” says Jonathan E. Gopman, a lawyer with Akerman Senterfitt in Naples, Fla.
7. Don't sign a joint tax return. That's the advice one of Jasmine's friends offers after overhearing Hal talk about a pending business deal. “Every time I hear them, I feel they’re one step ahead of the Justice Department," the friend says. When Jasmine replies, “I'd sign anything,” the friend chimes in, "It's called looking the other way.”
What the friend seems to understand, but Jasmine doesn't, is that filing separately helps protect a spouse from being held liable for the tax evader's taxes, interest and penalties. If they file jointly, she (assume it’s the wife) might get similar protections using what’s called the innocent spouse defense, but it’s harder to prove.
Still she’s not protected if, as the friend implies, she knew her husband was a crook, Gopman says. That’s a question that affects not just tax liability, but financial responsibility for a spouse’s wrongdoing. Moviegoers wonder whether Jasmine knew her husband was running a Ponzi scheme, just as we've debated whether Ruth Madoff was complicit in Bernie’s operation. While babysitting for her sister’s children, Jasmine confesses to no one in particular, “You’d have to be an idiot not to think his phenomenal success is too good to be true.”
8. Squeal on your spouse. Jasmine ultimately does. From an ethical standpoint she did the right thing, though that hardly seems to be her motivation. Jasmine knew about the fraud and relied on it "to maintain her lifestyle, ignoring Hal's infidelity until he told her their relationship was over," says Gopman. "She didn't love Hal – she loved the life with Hal and the status that came with it."
In addition, having already signed anything he put in front of her, she couldn’t argue that she didn’t know what was going on. So exposing his fraud brings her down financially along with him.
Spouses get asked to sign corporate documents and bank guarantees all the time, Gopman says. “It’s difficult from a personal perspective, especially in long-term marriages,” But his advice in these situations is, “If your spouse doesn’t have to sign a document, don’t let him or her sign it.”
9. Avoid credit card debt. Going broke hasn’t taught Jasmine to be thrifty. The food on the plane was awful, she complains to Ginger upon arriving in San Francisco, even in first class. Did she really say “first class?” She seems to have charged the ticket on a credit card and had no idea how much it cost. “You know me – I splurge from habit," she says when Ginger objects to the expenditure. Next time, fly coach and pack a picnic, Jasmine. For other thrifty tips inspired by one of the world’s wealthiest men, see my post, “You Can Get Richer Pinching Pennies Like Warren Buffett.”
10. Shop in consignment stores. Jasmine has expensive taste and is accustomed to paying retail for luxury items. She can find them for much less in the consignment shops that are popping up in tony neighborhoods of major U. S. Cities. See Seattle lawyer Wendy Goffe’s post, “Consignment Shop Treasures: Where To Go And What To Buy.” If Jasmine ever learns to use a computer, she’ll also be able to buy second-hand designer threads online.
11. Do background checks before getting romantic. Both sisters go wrong here after getting lucky – or so they think – at a party. Ginger hooks up with an audio salesman (Louis C.K.) who she takes for a gentleman until, after several steamy encounters, he tells her he's married.
Jasmine meets Dwight Westlake (Peter Sarsgaard), who is good enough to be the figment of her delusional fantasies. He’s a dashing widower, works for the state department in Vienna (that’s Austria – not Virginia) and has political aspirations. And wouldn’t you know: he’s just bought a house in Marin County overlooking the bay that happens to need decorating. He pictures himself in photo-op heaven with Jasmine, whose behavior briefly verges on normal. But then, after what seems like a short courtship, he asks her to marry him. As he pops the question, she pops a Xanax.
With good reason. Dwight hasn’t bothered to check out Jasmine’s story – that she was married to a surgeon who died of a heart attack. They’re on their way to pick out an engagement ring at Shreve & Co., the tony San Francisco jewelers, when the truth surfaces through an improbable and unfortunate turn of events. “What are you delusional?” Dwight asks when reality comes crashing down. “Didn’t you think I would eventually find out?” They abruptly part ways.
12. Make sure you have health insurance. Jasmine goes back to her sister's apartment and takes a shower. This seems to foreshadow what follows and "prepares her for a trip to that complete descent, a familiar trip she knew she would be taking," FORBES copy chief Deborah Markson-Katz observes. Then Jasmine exits her sister’s apartment, leaving the door ajar. With wet hair and no makeup, she is wearing that white Chanel jacket trimmed in blanket stitching again. But this time she’s left behind the Hermès Birkin that embodied her past life. She looks more vulnerable than ever as she sits down on a bench and starts talking to herself.
That’s Woody Allen echoing Tennessee Williams again, my colleague Richard Hyfler observes. “Jasmine will be picked up by EMS or the police, rather than by a courtly older gentleman like the one who escorted Blanche Dubois out of the Kowalski household,” he says. “Jasmine, too, will be dependent on the kindness of strangers – in her case because she hasn't kept up her health insurance.”
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Archive of Forbes Articles By Deborah Jacobs
Deborah L. Jacobs, a lawyer and journalist, is the author of Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide. You can follow her articles on Forbes by clicking the red plus sign or the blue Facebook “subscribe” button to the right of her picture above any post. She is also on Twitter and Google+
