"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.
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 the young boy, while imparting a little discipline. Add another 70 years in the age column and 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 (POA) 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 they'll tell you how difficult it can be.
Those looking out for the person's welfare will need to apply to the Family Court to be appointed as the welfare guardian of a mentally or physically incapacitated person.
Depending on the complexity of the situation, the application process can take some time, while the person who needs help is suffering.
What does that mean? Various people can apply to be a welfare guardian and/or a property manager of a subject person. This is not limited to family members; however, the Court will look favourably upon applicants who have a legitimate interest in the subject person's affairs.
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 their assets to support them. This should be considered if there are any reckless offspring or fast-talking spouse 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."
• Nick Stewart is the CEO and Authorised Financial Adviser at Stewart Group, a Hawke's Bay-owned and operated independent financial planning and wealth management firm based in Hastings. Stewart Group provides free second-opinion service on your current investments, insurance covers and retirement planning.
• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961.
