The Barefoot Investor has harshly criticized a couple in their 60s who do not want to share their fortune with their seven children because they do not trust any of them to take care of them when they grow up.
Self-proclaimed ‘grumpy boomers’ Donna, 68, and Steve, 69, wrote a letter to Scott Pape last week asking for advice on how to appoint someone to manage their finances.
The retired couple has an asset base of approximately $7.5 million and a total annual income of approximately $350,000.
Many retirees with that level of wealth would start sharing it with their children, but this couple fears that the children will not be willing to spend anything to care for their elderly parents.
‘We will most likely die without having spent everything we own. But here is my problem.
‘We have seven children between us and we would not trust any of them to look after us in a selfless and humane way when we can no longer look after ourselves.
‘Too many times we have seen children treat their elderly parents badly to protect their inheritance. Any suggestions while we still have control,’ they asked.
A boomer couple, enjoying their retirement with $7.5 million in assets, says they can’t trust their seven children to control their money (file image)
The Barefoot Investor told the couple that their situation did not reflect well on the family.
“What are the chances… you have seven children and they are all horrible?” Mr. Pape joked.
He explained that each state and territory has regulations for appointing a power of attorney, a person to manage finances or someone to make medical and health decisions, known as a durable guardian or medical treatment decision maker.
Pape stressed the importance of seniors choosing the right person to manage their finances and health.
“I discussed the options with my estate planning attorney, Dr. Brett Davies, who emphasized the importance of choosing someone you trust,” Pape wrote.
“It could be a professional such as an accountant, financial planner or lawyer, but these professionals charge fees and often hand off tasks to junior staff.”
Scott Pape (pictured) said it was important for the couple to choose someone they trusted and advised them to use their time and money to rebuild trust with their children.
However, Pape told Donna and Steve that the best path for the couple would be to repair their relationships with their children.
‘Your safest option may still be your children. However, that means that when you lose your mental capacity you will probably be under the control of your children. And that’s the problem,” Pape wrote.
“You may have seven bricks in the bank, but you’re not rich if you can’t trust them to take care of you as you get older.
‘If I were in your situation, I would spend as much time and money as possible with my children and grandchildren, trying to rebuild the trust and relationships you have with them. That is where true wealth lies.”
About 2.1 per cent of older Australians are estimated to have experienced financial abuse annually, according to the 2020 AIFS National Elder Abuse Prevalence Study.
The study found that 64 percent of elder financial abuse was perpetrated by a family member.
It comes as the Elder Advocacy Network received almost 1,300 calls about elder abuse in the six months to March 2024, ahead of World Elder Abuse Awareness Day on June 15.