Many families face the unfortunate reality of having to take over the affairs of an ageing parent or relative, particularly when they’ve become incapacitated by mental and physical health problems. If it’s happening in your family, you’ll know about the emotional and financial difficulties that this can cause.

It’s a good idea to help your parents with estate planning, and instructions on who will manage their affairs if they do become incapacitated, while they’re still enjoying good mental and physical health. Put a plan in place that will ensure your family is ready in the sad event that an older relative becomes incapable of managing their own finances. This will enable you to preserve their estate in the most efficient, cost-effective way, while sparing your family added strain and grief.

Which steps can you take if a family member becomes incapacitated?

Taking over the affairs of a member of your family who has been incapacitated is always distressing, but legal complications can make it even more difficult. Under South African law, as soon as a person is declared unable to manage their own affairs, all contracts with that person are restricted to protect them from exploitation. This means that they cannot appoint an agent to manage their finances.

Power of attorney

If your parent signs an agreement granting you power of attorney and they later start to suffer from mental illness or incapacity, that power of attorney falls away. A responsible person must be appointed to manage their financial affairs and assets. There are 3 ways to do this:

• Appointing a curator bonis
  You can apply to the High Court to have the affected person declared incapable of managing their affairs. If the court grants your application, it will appoint a curator bonis to take over and act in the best interests of the incapacitated person.
  
  
• Appointing an administrator
  In the case of mental illness or incapacity, you can also apply to the Master of the High Court to appoint an administrator to handle their affairs. You’ll need expert medical testimony from a mental health specialist to support your application.
  
  
• Setting up a Special Trust
  If your loved one has been diagnosed with the early stages of dementia, but medical experts confirm that they are still of sound mind, they can set up a Special Trust Type A and transfer all their assets into it, and they can choose the administrator who will manage it for them when they become unable to do so.

All these processes can be complicated, so you will need professional advice and help to put them in place. Court costs, attorney fees and expert testimony can be costly, and those expenses will come out of your ailing relative’s estate.

However, apart from the cost, there is an even more serious risk to consider. Has your parent made a will?

Mental incapacity and estate planning

If your family member lacks the capacity to sign a contract, they cannot sign a valid will. A will that they signed before they became incapacitated, however, will still be valid. Make sure that any at-risk family members draw up and sign a will while they still have full mental capacity. If they don’t have a valid will when they are declared mentally incapable of managing their affairs, they will in effect die intestate.