The truth about Power of Attorney and cognitive decline in South Africa

South Africa is facing a new crisis: Dementia, Alzheimer’s and stroke-related cognitive decline are rising fast, revealing gaps in awareness and leaving families financially unprepared for the long-term care that follows.

Alzheimer’s South Africa estimates that more than 190,000 South Africans are currently living with dementia, a figure expected to rise sharply as the population ages. This mirrors global trends. Worldwide, someone develops dementia every three seconds, with the fastest growth occurring in developing regions.

Stroke remains a major contributor to cognitive decline in South Africa, with research published in BioMed Central’s BMC Public Health showing nearly 60% of stroke survivors in sub-Saharan Africa experience cognitive impairment, affecting memory, reasoning, and decision-making abilities.

Yet, while public conversation often focuses on the medical impact, very little is said about the financial consequences when someone can no longer make decisions for themselves.

Ricardo Teixeira, Managing Director of BDO Wealth, says this gap leaves many families vulnerable. “We regularly see people trying to do the right thing for a loved one, only to discover that the tools they believed would protect them simply don’t apply when cognitive decline sets in. Without preparation, families can find themselves locked out of their own financial affairs at the very moment they need access the most.”

Why a Power of Attorney isn’t enough
A major misconception is that a general Power of Attorney (POA) continues to apply after the principal becomes mentally incapacitated. It does not.

Kyle Abrahams, In-house Attorney at BDO Wealth, explains: “A power of attorney is only valid while the person who granted it is still mentally capable. Once that capacity is lost, the document automatically lapses. The agent cannot act for someone who is no longer able to consent.”

Many South Africans continue using POAs without realising this limitation. Banks have become stricter, with several insisting on their own POA formats and applying a “reasonableness test” if there is any uncertainty around a client’s capacity. “Transactions performed after the loss of capacity can be challenged,” Abrahams adds. “Families often discover this too late – usually when they are already in crisis.”

Where South Africa stands on a lasting POA
Globally, many countries allow lasting or enduring powers of attorney, which remain valid after incapacity. South Africa proposed legislation in 2015 (Project 122), but has still not been introduced, nor passed.

Teixeira says, “An enduring power of attorney would give families a straightforward, humane and cost-effective way to prepare for cognitive decline. As professionals in the sector, we would welcome progress in this area.”

Curatorship and administration: the only current options
When someone becomes incapacitated, there are only two legal routes available:

1. Curatorship – A High Court application requiring medical reports, a legal representative, and significant documentation. It is slow, costly and can take several months or even years. “We’ve seen families wait more than a year for a curatorship to be confirmed and ordered by the Court,” says Abrahams. “During that time, assets are effectively frozen, even when funds are needed for medical care.”
2. Administration – A more accessible process through the Master of the High Court, usually for smaller estates (under R250,000). It is quicker and less expensive but still requires medical confirmation and ongoing reporting. This route is also only available for patients who are in cognitive decline as envisaged in the Mental Health Care Act.

Both mechanisms carry emotional and financial strain. They also create space for conflict, particularly when family members disagree on who should be appointed.

What South African families can do now
Although the legal environment is limited, South Africans are not without options. BDO Wealth recommends several proactive steps:

• Use joint accounts or dual signatories to ensure someone can transact in an emergency.
• Consider co-ownership of certain assets, with an understanding of the practical implications.
• Explore an inter vivos trust, which allows trustees to continue managing assets if one becomes incapacitated.
• Act early when there is a family history of cognitive decline.
• Work closely with a financial planner, ideally before, but especially at the first signs of impaired decision-making.

“Cognitive decline can be sudden, and the financial consequences are often immediate,” says Teixeira. “A financial guide can help families put the right structures in place before they’re needed – and support them if they find themselves navigating this difficult grey area.”