Interesting that your aunt cared for their mother for 30 years, drawing a small compensation rate, and your mother just took an interest in grandmother's care decades later when her inheritance started to dwindle.
I'm optimistic that you're just playing devil's advocate here, so I'll respond politely, because this article has my blood simmering. Not boiling yet, but close.
One important correction: The grandfather was aware of the finances for the first 20 of 30 years, the OP says that the losses occurred "since that time". So it's 10 years, not 30; multiply any compensation by 3.
A second, more important correction: the 'compensation' to the aunt comes from drawing on grandma's assets and also her income. OP asserts that grandma's income is $7k/month, or $840k. Added to the $400k in assets spent/lost, this is one and a quarter million dollars.
$13k/year is not enough to be visibly irresponsible with money, it's a reasonable or even small rate for family care. But $125k/year is unsustainable, as demonstrated by grandma's dwindling assets.
Counter-devil's advocate: The older you get, the more (exponentially sometimes) expensive it gets to keep you going from day to day. Depending on one's health, the cost of surviving an extra 6 months could be as much as the cost to stay living during the previous 10 years.
Regardless of the cost of living, death does very strange things to people and can flip an entire history of a relationship on its head. It happened with my family where a relatively calm and expected death ended up estranging members of the family because of what the deceased had written in the will.
I really am not looking forward to my parents' passing, as I live (and probably will still be) living abroad, though I am executor of their estate. Inheritance always brings out bad blood.
Having seen family members in similar situations, this is not "interesting" - your implication being that OP's mother is the swindler.
It's a common pattern: Family "takes care" of an elder while blowing through their money. Money now depleted, a more responsible family member steps in to manage the final years, only to be vilified by everyone who rode the gravy train in.
This exact same thing happened with my grandmother. My dad's brother is a scumbag and took it upon himself to spend her money while ostensibly taking care of her (the kind of care you'd expect from abusive alcoholic). My dad wanted my grandmother to actually spend her money on an elderly care facility, because she would have been much happier there among people as opposed to being essentially alone for the last 15 years of her life. But, her social reticence and my uncle's persistent guilt tripping kept her at home. It's a little hard to prove over the internet who was right or wrong in these cases, but I assure everyone that I could tell a few stories about my uncle that would leave absolutely no doubt.
Nothing warms the heart, after a family reunited after a diaper-change avoidance drama is resolved by finding a common hobby - such as collecting little pictures of former presidents.
One important correction: The grandfather was aware of the finances for the first 20 of 30 years, the OP says that the losses occurred "since that time". So it's 10 years, not 30; multiply any compensation by 3.
A second, more important correction: the 'compensation' to the aunt comes from drawing on grandma's assets and also her income. OP asserts that grandma's income is $7k/month, or $840k. Added to the $400k in assets spent/lost, this is one and a quarter million dollars.
$13k/year is not enough to be visibly irresponsible with money, it's a reasonable or even small rate for family care. But $125k/year is unsustainable, as demonstrated by grandma's dwindling assets.