Transcript of "What You Can Learn From This Beauty Queen’s Scandal"
What You Can Learn From
This Beauty Queen’s Scandal
Planning for Financial Dependence
One of the hardest facts of
growing older is that a day will
likely come when you are no
longer able to manage your
After years of saving and
investing, the money you’ve
amassed will be handed over
for others to manage.
But if you’re aware of this fact,
a little planning can make a
world of difference once it’s
necessary that you make the
transition to financial
The Beauty Queen’s Cautionary Tale
Planning for a financial transition affects people of all wealth levels.
In the not-too-distant past, one of the world’s richest women experienced a
“scandal” surrounding the management of her vast estate:
Personal worth: $38.6 billion
Majority stakeholder (31%) and heir to The L’Oreal Group -- the world’s largest
Family owned and operated
In 2011, Bettencourt’s then-estranged daughter, Françoise Bettencourt
Meyers, filed a suit claiming that her mother’s mental state had deteriorated
to the point that she was no longer capable of managing her own affairs.
The fight stemmed from Bettencourt’s long-standing friendship with famous
photographer François-Marie Banier. During their relationship, Bettencourt
had given Banier gifts totaling almost $1.36 billion.Together with other gifts
to Banier’s partner, Bettencourt’s generosity to the pair totaled nearly 10% of
her total worth.
Because Bettencourt was diagnosed with dementia, her daughter contended
that the heiress was manipulated by Banier to give those gifts.
The courts agreed, placing Bettencourt’s affairs under Meyers’ control.
What Bettencourt failed to do
Throughout the court battle, Ms. Bettencourt argued that she was capable of
managing her own financial affairs. What she failed to do was support her claims
through a personal system of checks and balances.
While it’s true that a person should be able to do what they wish with their
money, including people you trust in your decision making can be a helpful tactic
as you age.
Ultimately, you will still hold the final say, but using others as a sounding board
helps you by A) giving you second opinions on your plans and B) documenting
your intentions and wishes.
What she could have done
One of the best options for those wishing to include a trusted friend or family
member in their personal finances is to grant them power of attorney, which
allows the named person to act as an extension of the grantor.
Though Bettencourt felt that she was able to manage her finances, granting her
lawyer or a family member POA would have given her an alternative to acting
independently, which ultimately led to the family struggle.
Legally, a POA is charged with acting in the interest of the grantor, with a loyalty
to their wishes. If Bettencourt did not feel that any of her family members could
handle her finances with her best interests in mind, she could have paid a third
party to act as her POA.
Timeliness is everything
One of the limiting conditions of a power of attorney is that it must be granted
while the principle (Bettencourt in this example) still has the mental capacity to
Since Bettencourt was diagnosed with a moderate form of dementia, the court
was ultimately required to name those parties that would act in her stead as a
result of the lawsuit.
The lesson is to act early, before any complications from medical conditions can
prevent your planning from being successful.And dementia may prove to be a
tricky problem for the aging population.
Dementia is a silent stalker
With diagnoses of dementia, and Alzheimer’s disease in particular, expected to
double within the next 30 years, those preparing for their financial future should
include plans for handing over the management of their finances.
Early signs of dementia include memory loss and other cognitive difficulties,
which will naturally include difficulty managing money.
While there’s no consistent timeline for when cognitive difficulties begin, a
person diagnosed with Alzheimer’s disease or another form of dementia can live
anywhere from 5 to 10 years with declining brain function.
Planning for the worst
With the prevalence of dementia on the rise, it’s important for anyone
managing an investment portfolio to prepare for the worst-case scenario:
having to hand over control of your finances to a trusted family member,
friend, or professional.
Source: Flickr; kev_shine
Keys to a successful transition
Here are some tips to help you if and when the time comes that you need help
in the future:
• Maintain orderly files:Once a year, go through your documents and purge
purge any old info that’s out of date or belongs to an old account.
• Make your wishes known: Communicate with your family and friends (or a
a professional) to make sure they’re up to date on what you want for your
• Write it down: Document your wishes in an easy-to-find place.
• Make it legal: Designate a trusted person with power of attorney, talk to a
a lawyer about your estate planning, and keep copies of any fully executed
legal documents you complete.
Planning for your family’s financial success
includes more than preparing for medical
expenses down the road. We’ve found a simple
way to make sure that you and you family get the
most benefits from the IRS and Social Security…
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