When Someone Can No Longer Manage Their Own Money

There is a moment many families reach without warning. A parent's bank card is declined because they have forgotten the PIN for the third time. Bills stop being paid. A stranger has been calling about an investment. And the person whose money it is can no longer make decisions about it.

If you are trying to support parents through that, the first thing worth knowing is that no amount of family agreement gives you authority over someone else's money. The second is that there is a statutory route, it does not require a full court application, and it starts with the Master of a High Court.

The instrument most people rely on does not work here

Families often reach for a general power of attorney, signed years earlier, on the assumption it covers exactly this situation.

The general position in South African law is that it does not. A power of attorney is a mandate — authority to act on behalf of someone who could act themselves — and it falls away when the person who granted it loses the capacity to act. The moment it is most needed is the moment it stops working.

This is important enough, and counter-intuitive enough, to confirm with an attorney about your specific document rather than to take from a web page. But it is the reason the legislation described below exists at all: if a power of attorney solved this, there would be no need for a Master to appoint anybody.

Who may apply, and to whom

The application is made to a Master of a High Court, not by way of a full High Court application, and the person who may bring it is defined widely: any person over the age of 18.

Not only a spouse. Not only next of kin. A concerned friend, a neighbour or a caregiver may apply — though if the applicant is not a spouse or next of kin, the application must explain why they did not apply, and if they could not be found, what steps were taken to establish their whereabouts.

The Master may appoint an administrator to care for and administer the property of a person who is mentally ill, or who has a severe or profound intellectual disability, either on such an application or on a High Court order made after an appeal or an enquiry finding that the person is incapable of managing their property.

What the application must contain

It must be in writing, under oath or solemn affirmation, and must set out:

• the applicant's relationship to the person, and the explanation described above if the applicant is not a spouse or next of kin;
• the grounds for believing the person is incapable of managing their property;
• a statement that the applicant saw that person within the seven days immediately before submitting the application;
• the person's particulars, and their estimated property value and annual income;
• contact details of people who can provide further information about the person's mental health; and
• the available medical certificates or reports relevant to the person's mental health status and to their incapability of managing their property.

Proof must also be attached that a copy of the application was submitted to the person concerned. They are not to be dealt with behind their own back.

That seven-day requirement is easy to miss and easy to fail. It means the application must be brought by someone with recent, direct sight of the person — not assembled remotely from reports.

What the Master does next

Two routes are open.

Where the person's estimated property value and annual income are below a prescribed amount and the Master is satisfied that sufficient good grounds exist, the Master may appoint without conducting an investigation. The Master may also appoint an interim administrator while an investigation runs.

Otherwise, the Master must, within 30 days of receiving the application, cause an investigation by a suitably qualified person — where allegations need confirming, where more information is needed, or where the value and income are above the prescribed amount.

The investigator must confirm the allegations, and must call on the person concerned, or their legal representative, to respond to the application. They may summon people to provide information and documents, and may enquire into the person's financial position. They must then report to the Master. The investigation must be finalised within 60 days, or an extended period.

If the matter goes to a High Court Judge in chambers — on referral or on appeal — the Judge must deal with it within 30 days, giving the applicant, any independent mental health practitioners and the head of the relevant health establishment an opportunity to make oral or written representations, before making a recommendation. The Master must then, within 60 days, investigate to find a suitable candidate and appoint the administrator.

Anyone dissatisfied — the applicant, or the person concerned — may appeal within 30 days to a High Court Judge in chambers.

Who pays

The costs of the investigation come out of the estate of the person concerned.

With one pointed exception. Where the Master or the Judge takes the view that the application was trivial or vexatious, the costs are paid out of the applicant's own property.

That provision is worth reading twice before bringing an application in the middle of a family disagreement. The statute anticipates that these applications are sometimes brought for reasons other than the person's welfare, and it puts the cost where it belongs when they are.

The safeguards on the administrator

This is what a family most needs to understand, because handing control of someone's money to another person is precisely the risk the process is meant to manage.

Security must be lodged. Before the Master signs the official notice of appointment, the administrator must lodge security with the Master in an amount the Master determines. It may be reduced or dispensed with on good cause.

The appointment starts on signature. It takes effect from the date the Master signs that notice — not from the application, and not from any family decision.

The Master can tighten the arrangement later. If the Master learns that sequestration proceedings against the administrator have started or are likely, or believes it is in the person's best interest, the Master may increase the security or appoint a co-administrator — and then every act relating to the property requires both administrators' consent.

The home cannot simply be sold or bonded. The administrator may not alienate or mortgage immovable property unless authorised by a court order or with the Master's consent.

Family members cannot buy the assets. The administrator's spouse, child, parent, partner, associate or agent may not purchase or otherwise acquire any of the person's property — unless the Master consents, or the purchase was legally authorised in writing by that person before the administrator was appointed.

The money goes to the Master. The administrator must immediately pay all money received on the person's behalf into the hands of the Master. The exceptions are narrow: where the Master directs otherwise, where a legal document made by that person before the appointment authorises otherwise, or where the money is needed to repay a debt, pay the costs of keeping the property safe, maintain or educate that person or their dependants, or meet the current expenditure of their business.

Read together, those provisions mean an administrator is not a family member with a bank card. They are an officer accountable to the Master, holding security, restricted on the house, barred from selling to their own relatives, and routing money through the Master's office.

Ending the appointment

An administrator's term may be terminated only on application by one of three people: the person in respect of whom the administrator was appointed, the administrator, or the person who originally applied for the appointment.

The application is made by written affidavit to a Master, setting out the grounds and attaching the relevant medical certificates or reports.

The first of those three matters. The person whose property it is may apply to end the arrangement themselves. Capacity can return, and the Act does not treat the appointment as permanent.

What to do

1. Act before capacity is gone, if you still can. A person who still has capacity can put arrangements in place themselves. Ask an attorney what instrument suits the circumstances, and do not assume a general power of attorney will carry you through incapacity.
2. Gather the medical evidence. Certificates and reports about mental health status and about the inability to manage property are what the application runs on.
3. See the person. The application requires a statement that you saw them within the preceding seven days.
4. Establish the estimated property value and annual income. It determines whether the Master may appoint without an investigation.
5. Give them a copy. Proof that the application was submitted to the person concerned must be attached.
6. Expect security, and expect the Master. An administrator lodges security and pays money into the Master's hands. If someone is proposing an arrangement without those features, it is not this process.
7. Do not bring it to win an argument. A trivial or vexatious application is paid for by the applicant.

Two adjacent matters. Protecting an account from unauthorised activity while all this is arranged is a different problem, and what to do if you suspect fraud on a bank account covers the immediate steps; where money is shared between family members day to day, joint accounts and shared money sets out how those accounts actually work.

And this process governs a person's property during their lifetime only. What happens afterwards is decided by a will, and by an executor rather than an administrator — our guide to wills is the starting point for that separate question. The two are often confused, and arranging one does nothing about the other.

For everything else, start at our money guides.

Frequently asked questions

Does a power of attorney cover someone who has lost capacity? The general position in South African law is that it does not: a power of attorney is a mandate and falls away when the person who granted it loses the capacity to act. Confirm the position for your specific document with an attorney.

Who can apply for an administrator to be appointed? Any person over the age of 18. If the applicant is not a spouse or next of kin, the application must explain why they did not apply and, if they could not be found, what steps were taken to locate them.

Where is the application made? To a Master of a High Court, in writing and under oath or solemn affirmation.

Must the person be told? Yes. Proof must be attached that a copy of the application was submitted to the person concerned, and the investigator must call on that person or their legal representative to respond.

How recently must I have seen them? The application must state that you saw the person within the seven days immediately before submitting it.

Does the Master always investigate? No. Where the person's estimated property value and annual income are below a prescribed amount and the Master is satisfied sufficient good grounds exist, an appointment may be made without an investigation. Otherwise an investigation must be started within 30 days and finalised within 60.

Who pays for the investigation? The estate of the person concerned — unless the Master or the Judge considers the application trivial or vexatious, in which case the applicant pays out of their own property.

Can the administrator sell the house? Not on their own. Immovable property may not be alienated or mortgaged unless authorised by a court order or with the Master's consent.

Can the administrator's family buy the assets? No, unless the Master consents or the purchase was legally authorised in writing by the person concerned before the appointment. The bar covers the administrator's spouse, child, parent, partner, associate or agent.

What happens to money the administrator collects? It must be paid immediately into the hands of the Master, unless the Master directs otherwise, an earlier legal document allows otherwise, or it is needed to repay a debt, keep the property safe, maintain or educate the person or their dependants, or run their business.

Can the appointment be ended? Yes, on application by the person concerned, the administrator, or the person who applied for the appointment, by written affidavit to a Master with the grounds and the relevant medical reports.

Is an administrator the same as an executor? No. An administrator manages a living person's property; an executor deals with a deceased estate. Arranging one does nothing about the other.