Keeping an eye on the Bank of Mum

Australians are living longer and living richer than at any time in our history. The Intergenerational Report predicts that 40,000 people will celebrate their 100th birthday in 2055. Some older women will enjoy their wealth – travelling the world, with their luggage broadcasting that they are 'spending their children's inheritance'. Others will live in an aged care facility while their children keep their eyes peeled on the 'Bank of Mum'.

State Trustees Victoria report 'For Love or Money: intergenerational management of older Victorians' assets' shows that women over the age of 80 are most at risk of financial elder abuse. This research found that adult sons are the most common perpetrators.

Financial elder abuse involves taking or misusing an older person's money, property or assets. Studies confirm that financial abuse is the fastest-growing type of abuse of older women. So much so that Senior Rights Victoria suggested the terms of reference for the Royal Commission into Family Violence should include elder abuse.

When a father dies, some adult children assume what was once 'Mum and Dad's money' is now their money, not their mothers'. They are not willing to wait for their inheritance until after their mothers die. Children with 'Early Inheritance Syndrome' feel a sense of entitlement to their mothers' assets.

These impatient children will actively seek ways for their mothers to 'gift' them money, or will interfere in the management of their parents' assets to protect what they see as their entitlement. They will keep a close eye on their mother's assets and curtail her expenses, such as money she spends on holidays and carers.

According to the Office of the Public Advocate, older women are also more likely to be declared legally incapable than older men. This may be due to the fact that women live longer than men. Some children assume that older women, particularly those who have not been the family's breadwinner, are unable to manage their own finances. After the father dies, they encourage their mother to appoint a financial power of attorney, often a son.

Children with 'Early Inheritance Syndrome' make assumptions that devalue the rights of older women.

1. "Mum doesn't need money, and it's going to be mine anyway."

In cases of financial elder abuse, this is the most common justification given for taking a mother's money whilst she is alive.

2. "Mum finds talking about her finances stressful."

Some children believe that their mother finds discussions about financial issues complex and stressful. This is not only patronising but it also disempowers older women to make choices about how their money is spent.

3. "Having a large amount of money doesnot improve Mum's quality of life.

Most of us take comfort in the security of having savings in the bank. Why are older women different?

4. "Mum will be no worse off after gifting her money to her children".

This statement is absurd. By gifting money to their children, the children are better off at the expense of their mother. The less money an elderly woman has, the less money she will be able to spend on herself.

5. "Reducing Mum's income will reduce her fees at the aged care facility".

Lower fees at the aged care facility means more money for the beneficiaries of the will (i.e. the children). However, many older women may appreciate the care that they receive in an aged care facility, and are happy to pay higher fees for receiving good care.

6. "Reducing Mum's incomewill reduce the amount of tax she needs to pay"

Gifting money to children will result in Mum paying less tax. This may be a good thing for the children, but certainly not for society.

7. "Mum's current will cannot be changed".

Most people change their wills throughout their lives as their circumstances change. Why are older women different? Spending years in an aged care facility may change an older woman's ideas about how the money is distributed after she dies. She may prefer to give some money to Doctors without Borders, The Lost Dogs Home, or even a kind nurse at the aged care facility. This is her decision, not her children's.

8. "By gifting money to the children, this gift reduces their children's loans and interest payments on these loans."

Should middle-age professional people expect their elderly mother to assist them to manage their 'lifestyle choices'?

Financial elder abuse may begin with the best intentions - with an elderly woman asking a child to act as her financial power of attorney. This can quickly progress to a sense of entitlement, particularly when adult children have mortgages or debts.

There is little reliable data on the extent of financial elder abuse. It is often a silent crime – unreported and unacknowledged. Although the banking industry has introduced initiatives to help prevent this silent crime, financial elder abuse remains difficult to police.