The arduous reality faced by Mr. A, a 59-year-old caring for his mother with dementia residing in a nursing facility, is a story that many middle-aged people can empathize with. When he urgently needed 15 million won for medical and nursing care fees, he attempted to withdraw 250 million won from his mother's account but was turned away at the bank counter. Financial institutions were restricting withdrawals by family members out of concern for future legal issues such as inheritance disputes. As advised by the bank employee, Mr. A had to apply to the court to initiate guardianship for an adult since he had failed to set up a trust in advance. Consequently, he could not utilize the funds until several months elapsed. Such a structure unable to respond to urgent financial needs brings great anxiety to families of dementia patients.
Mr. B, a 74-year-old diagnosed with mild cognitive impairment, does not yet have significant difficulties in daily life but feels a decline in memory and concentration, harboring anxiety about the worsening of dementia. With the recent surge in voice phishing crimes targeting elderly dementia patients, concerns about asset management have deepened. It is burdensome to entrust it to his children, and managing it himself is also uneasy. As aging accelerates, the asset scale of dementia patients has surpassed 17.2 trillion won last year and is projected to reach 48.8 trillion won by 2050. As the economic scale grows and the assets of the elderly increase, the risks of mismanagement and financial fraud are also expanding accordingly.
The core issue is how to protect vast assets that are effectively blocked due to impaired judgment caused by dementia. It is most effective to decide in advance how to utilize currently held assets and delegate authority to whom before decision-making abilities decline. While response after the onset of dementia is possible, legal procedures take several months, making it difficult to cope appropriately with urgent situations. Against this background, the government and the National Pension Service have prepared a plan to publicly manage the assets of elderly people with dementia or mild cognitive impairment and disburse medical and living expenses according to a planned cash flow, starting a pilot project for dementia safe-asset management services this month.
The core of the service lies not merely in simple storage but in automatically allocating necessary costs monthly so that assets are actually used for living. Unexpected large withdrawals or contract changes require review procedures to prevent fraud or economic abuse in advance. The enrollment target includes not only dementia patients but also elderly people who find asset management difficult due to mild cognitive impairment. In the case of dementia patients, appointing a guardian is essential. If there is no appropriate proxy, the government will connect and support through a public guardian. The scope of assets accepts up to 1 billion won in cash assets. To protect the middle class, it has a cost structure cheaper than private trusts, making it free for basic pension recipients and around 0.5% annually for the rest.
If the asset scale exceeds 1 billion won or if you wish to manage real estate, you should consider private financial products such as dementia trusts. Banks and insurance companies automate post-mortem property distribution or living expense disbursements through various products such as will-substitute trusts, dementia safe trusts, and insurance claim rights trusts. Will-substitute trusts distribute automatically after death, reducing legal disputes, but have high initial costs, while insurance claim rights trusts are suitable for multi-child households for managing inheritance funds. Public trusts aim for asset protection and expenditure control, while private trusts aim for asset appreciation and transfer, so a dualization strategy utilizing both products as complementary goods is needed. However, the public trust starting this month is a pilot project with limitations on targets and amounts, and will be expanded to a full-scale project from 2028.