Are you helping mum or dad with their money? Here’s why banks sometimes block transfers, what a power of attorney can and can’t do, and why early family conversations matter.

What families need to know about managing a parent’s money

It usually starts with something small: You help Mum set up online banking. You pay a few bills for Dad when the paperwork gets fiddly. Over time, you become the one who knows the passwords, talks to the aged care provider and keeps an eye on the accounts.

Then one day a larger amount needs to move. Perhaps Mum wants to help you through a tight patch, but the bank says no.

For many families, this is the moment they discover that helping a parent with money and having the right to make decisions about it are two very different things. While the move from helping to managing happens gradually, the rules are more black and white.

None of this means anyone has done the wrong thing. It means the planning hasn’t quite caught up with the role you’ve taken on. Here’s what’s worth knowing, ideally before you need it.

Why would a bank stop a transfer my parent has agreed to?

Banks have a responsibility to look out for older and potentially vulnerable customers. Under the Australian Banking Association’s industry guideline on financial abuse, banks are expected to recognise warning signs and take steps to protect customers when something looks out of the ordinary.

A large transfer from an older person’s account to a family member, particularly one who is managing their affairs or will one day inherit, is exactly the kind of transaction those safeguards are built to notice. The bank may ask questions, ask to speak with your parent directly, request documents or put the transaction on hold.

What is “inheritance impatience”?

You may hear the term “inheritance impatience” used to describe one of the risks banks are watching for: the point where a parent’s money starts to be treated as a future inheritance rather than money that still belongs to them. It’s an uncomfortable phrase, and most families who come up against these safeguards are simply trying to help. But a bank can’t see your intentions; it only sees the transaction.

It helps to remember why the safeguards exist. Financial abuse of older Australians is most often carried out by someone they know and trust, and it’s rarely dramatic. It can look like gentle pressure to lend or give money, a “temporary” loan that’s never repaid, or decisions gradually made for someone rather than with them. The checks that frustrate a well-meaning family are the same ones that protect someone else’s mum or dad.

Whose money is it, really?

It’s a simple answer, but an important one: it’s still Mum and Dad’s money. Its first job is to look after them.

That might need to cover a much longer stretch than anyone expects. Retirement can last 25 years or more, and care needs tend to grow over time. In-home support and residential aged care can be significant costs, and they’re hard to predict in advance. Then there’s the life your parents still want to live: travel, hobbies, helping grandchildren, staying in the family home for as long as possible.

An inheritance is what’s left once all of that has been taken care of. Good financial planning helps parents understand what their money needs to do for them, and what they can comfortably afford to share along the way.

What can a power of attorney legally do?

An enduring power of attorney allows someone (the attorney) to make financial and legal decisions on another person’s behalf, and it continues to work if that person loses capacity. It’s one of the most important documents your parents can have in place.

In practice, much of an attorney’s role is the everyday running of someone’s financial life. Depending on what the document allows, an attorney may be able to:

  • Manage bank accounts and pay everyday bills.
  • Deal with banks, super funds and government agencies on your parent’s behalf.
  • Look after investments and other financial assets.
  • Make decisions about property, including selling the family home where that’s authorised and appropriate.
  • Pay aged care, medical and other care costs from your parent’s funds.

Exactly what an attorney can do depends on the wording of the document and the law in your state or territory. Your parent can give broad authority or limit it to particular matters, and can set conditions on when it starts. Whatever the scope, every one of these tasks is carried out with your parent’s money, for your parent’s benefit.

However, it isn’t a blank cheque. In NSW, an attorney must act in the best interests of the person who appointed them, act in good faith and avoid conflicts of interest. As a general rule, an attorney can’t use the person’s money to benefit themselves or to make gifts to others unless the power of attorney document expressly allows it, and even then only within limits. The rules vary between states and territories, so it’s worth getting legal advice on how they apply to your family.

This is where things can get delicate. The person managing Mum or Dad’s finances is often also a beneficiary of their estate. That doesn’t mean they’ll do anything wrong, but it does create a potential conflict of interest, and it’s one reason banks, and sometimes other family members, may look more closely at certain transactions. Keeping clear records and keeping your parent’s money separate from your own goes a long way.

What’s the difference between an attorney (enduring power of attorney) and an executor?

These two roles are often confused, but they apply at completely different times.

When they act
Attorney: While your parent is alive, including if they lose capacity
Executor: Only after your parent has died

What they manage
Attorney: Your parent’s financial and legal affairs, in your parent’s best interests
Executor: The estate, according to the will

Where the authority comes from
Attorney: The power of attorney document
Executor: The will (and, usually, a grant of probate)

When it ends
Attorney: When your parent dies, or if the power is revoked
Executor: When the estate is finalised

In other words, being named as executor in a parent’s will gives you no authority over their money while they’re alive. And a power of attorney stops working the moment they pass away. Decisions about health, care and where someone lives are different again, and in NSW are covered by appointing an enduring guardian.

Can parents give money to their children while they’re alive?

Absolutely. Many parents love the idea of a “living inheritance”: helping with a home deposit, school fees or a difficult season, and getting to see the difference it makes. There’s nothing wrong with that. It just needs to be done thoughtfully.

  • It should genuinely be their decision. Ideally made while they can clearly express their wishes, without pressure from anyone.
  • It should be documented. Is it a gift or a loan? If it’s a loan, how and when will it be repaid, and what happens if it isn’t? Clarity now prevents misunderstandings later, especially between siblings.
  • It should be weighed against their future needs. A generous gift today shouldn’t leave them short if care costs rise down the track.
  • It may affect Centrelink and aged care. Under the gifting rules, a person can give away up to $10,000 in a financial year, or $30,000 over five financial years, without it affecting the Age Pension. Amounts above that are still counted as their assets for five years from the date of the gift, and can also affect aged care means testing.

Fairness matters too. If one child receives help now, will that be considered later? Different families answer that question differently, and there’s no single right answer. What matters is that the answer is your parents’, and that everyone understands it.

Why should families talk about this now?

The best time to have these conversations is while Mum and Dad can still clearly tell you what they want. Once capacity becomes an issue, options narrow quickly, and families are often left guessing or relying on whatever paperwork happens to be in place.

Talking early also helps manage expectations. Rather than children discovering later what they can and can’t do with their parents’ money, everyone has a chance to understand what the money needs to provide, who will be responsible for what, and what each person can realistically expect. It’s one of the most effective ways to avoid disagreements between siblings down the track.

A few questions worth asking:

  • What do Mum and Dad want their money to do for them over the rest of their lives?
  • Who will help with day-to-day finances, and who will make bigger decisions if that becomes necessary?
  • Are their will, enduring power of attorney and enduring guardianship up to date, and do the right people know where to find them?
  • Would they like to help any of their children financially now? If so, how will that be handled fairly?
  • Who else should be involved, such as their solicitor, accountant or financial advisor?

These aren’t always easy conversations. Having a neutral professional in the room can make them feel less personal and more practical.

How can a financial advisor help the whole family?

Planning isn’t just about the eventual transfer of wealth. It’s about the years beforehand too, when adult children are increasingly involved in their parents’ financial lives while still managing their own.

That can mean helping parents plan for retirement, aged care and their estate so their own security comes first. It can mean helping their children understand their role, their responsibilities and their own financial picture. And it often means working alongside the family’s solicitor and accountant so that the legal documents, the tax position and the financial plan all line up.

You can find out more about our estate planning advice on our website.

If this has raised any issues for you that you’d like to discuss, pleasecontact usorbook a chat with Jo.



FREQUENTLY ASKED QUESTIONS


What is inheritance impatience?

Inheritance impatience is a term sometimes used to describe a situation where a parent’s money begins to be treated as a future inheritance rather than money that still belongs to them and should support their own needs and care. Banks and advisors watch for it as one possible sign of financial pressure on an older person.

Can a power of attorney give money to themselves?

Generally, no. In NSW an attorney can only benefit themselves or make gifts if the power of attorney document expressly authorises it, and then only within limits. The rules differ between states, so seek legal advice.

Does a power of attorney still work after someone dies?

No. A power of attorney ends when the person dies. From that point, the executor named in their will is responsible for managing the estate.

How much can parents gift without affecting the Age Pension?

Up to $10,000 in a financial year, or $30,000 over five financial years. Gifts above these limits are counted as assets for five years and can also affect aged care means testing.

Why did my parent’s bank freeze or delay a transfer?

Banks follow industry guidelines designed to protect older customers from financial abuse. Large or unusual transactions may be paused while the bank checks they reflect the customer’s genuine wishes, even when family members are acting with the best intentions.



The information in this article is general in nature and does not consider your personal objectives, financial situation or needs. It is not legal advice. You should consider whether it is appropriate for you and seek professional financial and legal advice before making any decisions.