Money management after loss of mental capacity
In the unfortunate event that you become mentally incapable, you would usually depend on your family and friends to take care of your money matters. However, they may encounter many difficulties in doing so if you have not made an Enduring Power of Attorney (EPA) in advance.
You cannot tell how much money you have and where you have put it
Your family must first know how much money you have and where it is in order to help you manage it.
Your family will not be able to access your assets and property
If your property and accounts are solely owned in your name, your family will not be able to access and manage it. They may need to use their own money to pay for your medical and day-to-day expenses.
Your family may have disputes over taking care of your assets and property
Your family may have conflicting views over how to manage your assets and property. If it is not properly dealt with, your care would eventually be compromised.
Your assets and property is at risk of financial abuse
While sad, someone close to you might con you out of your money when you have lost mental capacity to manage your finances and property.
Guardianship and Committee
If you lose mental capacity but have not made an EPA, in order to manage your money effectively, your relatives may need to apply to the Guardianship Board in accordance with the Mental Health Ordinance to appoint a guardian (who could be your family or friend) for you. However, the guardian has limited authority over your financial matters. Your guardian can only mange a limited amount of your money (cash or savings at bank), which currently is capped at $15,000 per month, to pay for your maintenance.
The main function of guardianship is to take care of the welfare of the mentally incapacitated. If your relatives needs wider power to handle and manage your property, for example, to let, sell, transfer or manage your real estates and other investments on your behalf, they need to apply to the High Court to appoint a committee. The application process to appoint a committee involves complicated legal procedures. You may need to hire a lawyer to help process the application.