The True Story in Detail
The story of Lazarus and the Rich Man is a parable (Matthew 13:34). Once this is recognized the interpretation behind the narrative can become quite meaningful. It is also very important to note the context in which the parable is found. There was a reason why Christ spoke this parable at that time. Christ had just given His teaching about the unjust steward who had mishandled his master’s money (Luke 16:1–13). This parable was told to further illustrate what proper stewardship is.
Let us first consider the identification of Lazarus. This is the only time in Christ’s parables that a person’s name is used. Some have imagined that this use of a personal name precludes the story being a parable. But this is hardly true. The name "Lazarus" is a transliteration of the Hebrew "Eleazar" (which means "God has helped"). The name was a common Hebrew word used for eleven different persons in the Old Testament.
When one analyzes the parable, this Eleazar can be identified. He was one who must have had some kind of affinity with Abraham (or the Abrahamic covenant), for the parable places him in Abraham’s bosom after death. But he was probably a Gentile. The phrase "desiring to be fed with the crumbs which fell from the rich man’s table" was typical of Gentile identification (see Matthew 15:22–28). Even the phrase "laid at his gate" is reminiscent of the normal one used by Jews to denote the Gentile proselyte "Proselyte of the Gate." This Eleazar must also have been associated with stewardship because Christ gave the parable precisely for the reason of explaining what represents the true steward.
There was only one Eleazar in the historical part of the Bible that fits the description. He was a person associated with Abraham, he was a Gentile (not an ethnic part of the Abrahamic family), and a steward. He was Eleazar of Damascus, the chief steward of Abraham.
"And Abram said, ‘Lord God, what wilt thou give me, seeing I go childless, and the steward of my house is this Eleazar [Lazarus] of Damascus and lo, one born in my house is mine heir.’"
- Genesis 15:2–3
Long ago it was suggested that the Lazarus of the parable represented the Eleazar associated with Abraham (Geiger, JuJ Zejtschr., 1868, p. 196 sq.), but for some reason very few modern commentators have taken up the identification. But once this simple connection is made, a flood of light emerges on the scene which can interpret the parable with real meaning.
The Lazarus of the parable represented Abraham’s faithful steward Eleazar. And faithful he was! Though he had been the legal heir to receive all of Abraham’s possessions (Genesis 15:3), Abraham gave him an assignment which was to result in his own disinheritance. But the Bible shows he carried out the orders of Abraham in a precise (and faithful) way.
"And Abraham said unto his eldest servant of his house [Eleazar], that ruled over all that he had, ‘Put, I pray thee, your hand under my thigh: and I will make thee swear by the Lord, the God of heaven, and the God of the earth, that you shall not take a wife unto my son [Isaac] of the daughters of the Canaanites.’"
- Genesis 24:2–3
Eleazar agreed to do what Abraham desired, although the fulfillment of his task meant the complete abandonment of Eleazar’s claim to any of Abraham’s inheritance—both present and future! Each step that Eleazar took northward to procure a wife for Isaac was a step towards his own disqualification. Eleazar recognized this, for he admitted to Laban, Rebecca’s brother, that "unto him [Isaac] hath he [Abraham] given all that he hath"(Genesis 24:36). There was nothing left for him! Thus, Eleazar’s faithfulness to Abraham resulted in his own disinheritance from all the promises of blessing which God had given to Abraham. They were now given to Isaac and his future family. That inheritance included wealth, prestige, power, kingship, priesthood, and the land of Canaan as an "everlasting" possession. But now Eleazar was "cast out." He and his seed would inherit nothing. Thus, the parable calls Lazarus a "beggar" who possessed nothing of earthly worth.
Who Was the Rich Man?
The Rich Man was an actual son of Abraham. Christ had him calling Abraham his "father" (Luke 16:24) and Abraham acknowledged him as "son" (verse 25). Such sonship made the Rich Man a legal possessor of Abraham’s inheritance. Indeed, the Rich Man had all the physical blessings promised to Abraham’s seed. He wore purple, the symbol of kingship, a sign that the Davidic or Messianic Kingdom was his. He wore linen, the symbol of priesthood, showing that God’s ordained priests and the Temple were his. Who was this Rich Man who possessed these blessings while living on the earth?
The Israelite tribe that finally assumed possession of both the kingdom and priesthood, and the tribe which became the representative one of all the promises given to Abraham, was Judah. There can not be the slightest doubt of this when the whole parable is analyzed. Remember that Judah had "five brothers." The Rich Man also had the same (verse 28).
"The sons of Leah;  Reuben; Jacob’s firstborn, and  Simeon, and Levi, and Judah, and  Issachar, and  Zebulun."
- Genesis 35:23"And Leah said ... ‘now will my husband be pleased to dwell with me; for I have born him six sons.’"
- Genesis 30:20
Judah and the Rich Man each had "five brethren." Not only that, the five brothers of the parable had in their midst "Moses and the prophets" (verse 29). The people of Judah possessed the "oracles of God" (Romans 3:1–2). Though the Rich Man (Judah) had been given the actual inheritance of Abraham’s blessings (both spiritual and physical), Christ was showing that he had been unfaithful with his responsibilities. When the true inheritance was to be given, Judah was in "hades" and "in torment" while Lazarus (Eleazar, the faithful steward) was now in Abraham’s bosom. He was finally received into the "everlasting habitations" (verse 9).