“But I want it, I want it, I need it!”
Paul had gone to visit his sister and his nephew. He’d walked into a financial battle between Mother and 11-year-old son over the game Fortnite. You might say she had a fiduciary duty to the young lad in moments of madness, but he wasn’t having a bar of it.
“It’s $29 and you don’t have that money right now,” she reasoned.
“Yes, I do, I have plenty of money. I have money in my trust,” he raged back.
At stake was an expansion pack for the game which has young and even old enthralled. Who knows what it would have added to his life beyond what the game already did, but there was a voracious want there and it wasn’t taking no for an answer.
“Your savings aren’t for computer games, if you want the expansion pack you’ll have to save up for it,” his mother continued.
“I need it now, I have $20 here already, so…”
“No, you don’t, you have $10, the other $10 is going in your bank account, you know that,” his mother said, cutting him off.
Apparently this is Fortnite
After a few minutes of the same back and forth, it was time to go into debt. After the first loan request was quickly rejected by the bank of Mum, the bank of Uncle was drawn into the fray.
“Mate, if you’re going to be borrowing money you don’t want to start doing it when you’re desperate. If you want to borrow $29, we’re going to have to talk terms. It’s an unsecured loan, you don’t have a strong income, and I’m going to hit you with some heavy interest charges. Because you’re my friend, I’m going to suggest you save up,” Uncle Paul said, declining the application.
This one seems cut and dried. Both mother and uncle are looking out for young lad, while imparting a little discipline. Add another 70 years in the age column, turn the young one into a parent, and strangely things can get more complicated.
Just like the young have little capacity for rational decision making, it’s also an affliction that can plague the old. Throw in some less ethical members of the family and there can be a minefield ahead.
A power of attorney can be a difficult topic on several levels, especially for those who don’t or won’t understand it because they don’t think anyone should act on their behalf. Or in the case of an offspring, have their eyes on a financial prize when the elder departs.
If an elder is losing their faculties or has a diagnosis of something like Alzheimer’s, eventually some form of care will be needed. Without a POA in place, ask any financial adviser and they’ll tell you “it’s a pain in the backside.” Those looking out for the person’s welfare will need to visit the guardianship board, all while the person who needs help is suffering.
What does that mean? Front the board to prove you’re of good character and integrity. It’s been described as an inquisition. Don’t pass and they could appoint the public trustee and then there’s no rights. Maybe that’s a good thing in some circumstances, but if someone is determined to avoid the idea of signing a POA to give control to someone they trust, it will be strangers making the decisions.
While it does mean a legal and fiduciary duty to act in a person’s best interest, a POA should be chosen wisely. Infirmness doesn’t mean a POA has the right to start divvying up assets early because they like the stylings of the latest Ford Ranger, but it doesn’t mean the unscrupulous won’t try. Someone might live on for a decade with a degenerative disease and require all of their assets to support them. This should be taken into account if there are any reckless offspring or fast-talking idiot spouses in the picture.
While some decision making won’t improve with time, there is hope for others.
On next visit, Uncle Paul asked his nephew, “So what did you decide, to save up for the Fortnite expansion pack or not, mate?”
“Not going to bother any longer. One of my mates said it’s not worth it.”
This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.