Legal Eye: how best to protect the assets of the mentally incapacitated

Losing a loved one is painful, but it is equally distressing if a family member becomes mentally incapacitated because of ageing, a stroke or an accident. How best can you serve their interests, and what matters most? Protecting the assets of a mentally incapacitated person is an important duty because it allows you to ensure these resources will be preserved and properly utilised towards their care and well-being.

Mentally incapacitated person refers to people who lose their capacity to make informed decisions in managing their financial affairs and disposing of their assets. This disability is relatively apparent to family members if the person is diagnosed with Alzheimer's disease or has suffered a stroke or accident.

In some situations, however, the mental deficiency may not be immediately noticeable; for example, when an aged person is in the early stage of dementia. Family members may not notice or see behavioural changes promptly if they are not living with the elderly person, or if their relative is in an old people's home. As the population ages, these problems are likely to increase and families need to understand the available options.

There is considerable concern that a vulnerable person may be manipulated into giving away their money. In extreme cases, family members may start disputing arrangements once it is clear the person is no longer capable of managing their own finances.

Therefore, it is important to protect loved ones who are unable to handle their finances due to lack of mental capacity.

Every case is different, depending on factors such as the individual's role, the types of assets they have, marital status, the dynamics between the family members and any dependents other than a spouse or children.

The options for helping to manage a vulnerable person's assets are either through an application to the Guardianship Board to be appointed a legal guardian, or by applying to the High Court for a committee to be appointed under the Mental Health Ordinance. Though each application has its unique features, the person who assumes either role must act in the best interest of the mentally incapacitated person.