Have you ever thought, "What if my parent develops dementia?"
If dementia continues to progress, you're bound to have all kinds of concerns—what will happen, how to handle caregiving, and how to interact with your parent.
Waiting until after onset can lead to delayed responses and regret.
By taking preventive measures now, while dementia hasn't yet developed, you'll be able to respond quickly even if it does occur.
With that in mind, this article explains what kind of disease dementia is, the potential troubles it can cause, how to deal with them, and the procedures that will become necessary.
Please use this as a reference so you can navigate life with confidence even if a parent develops dementia.
What Kind of Disease Is Dementia?
Dementia is a condition in which brain disease or damage causes a decline in cognitive functions such as memory, interfering with daily life.
Forgetting new things or forgetting names and the names of objects happens to everyone as they age.
However, dementia involves symptoms such as forgetting that an experience occurred at all, or having no awareness that one is forgetting things—making it different from age-related forgetfulness.
Take breakfast as an example.
With age-related forgetfulness, a person might forget part of what they had for breakfast, whereas with dementia, a person forgets having eaten breakfast at all and may try to eat again afterward.
When something goes missing, a person with age-related forgetfulness will try to find it themselves, but a person with dementia may blame others, saying things like "someone stole it."
According to the Ministry of Health, Labour and Welfare, approximately 6 million people aged 65 and over in Japan were estimated to have dementia as of 2020.
It is predicted that approximately 7 million elderly people will have dementia by 2025, making it necessary to deepen our understanding in anticipation of a parent developing the condition.
Dementia also comes in several types.
· Alzheimer's type dementia
· Vascular dementia
· Lewy body dementia
· Frontotemporal dementia, etc.
Alzheimer's type is said to be the most common.
If appropriate treatment is received while symptoms are mild, medication may slow progression and improvement of symptoms can be expected in some cases.
Therefore, if you notice something seems "off" or "different from before," consult a specialist promptly and receive appropriate care.
It is important to act quickly by visiting your family doctor, a memory clinic, or consulting your local community comprehensive support center.
What Are the Risks When a Parent Develops Dementia?
When dementia develops, a wide range of symptoms can arise: memories that were once intact are lost, delusions such as claiming things were "stolen" cause distress, a person who wanders cannot find their way home, and verbal abuse is directed at family members or care workers.
In particular, money-related troubles can involve the entire family and escalate into serious disputes, so they must be addressed early.
Here are the risks to consider when a parent develops dementia.
Inability to Manage Finances
When a parent develops dementia, declining judgment and planning ability makes managing money difficult.
A variety of problems arise, such as spending pension payments in their entirety as soon as they are received, or using funds needed for daily living to satisfy personal desires.
There are also cases where high-priced items are purchased one after another until payment becomes impossible.
Furthermore, there are real instances of people repeatedly falling victim to fraudulent sales tactics and scams without their family realizing it.
Inability to Withdraw Savings
When a parent develops dementia, family members need to take care of them.
At that time, significant costs arise for medical care and nursing, such as hospital visits and day service attendance.
Even if a long-term care certification is obtained, out-of-pocket costs still occur, so funds for caregiving must be prepared.
Many people consider using the parent's bank account to cover these costs.
However, please be aware that banks generally will not allow anyone other than the account holder—even family members—to make withdrawals.
If you cannot withdraw from your parent's account, you will have to pay the costs yourself.
While average costs vary by the degree of dementia, according to a 2021 survey by the Life Insurance Culture Center, the average lump-sum cost for caregiving was 740,000 yen, with an average monthly cost of 83,000 yen.
The average duration of caregiving was approximately 5 years and 1 month, so it is clear that substantial costs accumulate.
Many people worry about whether they can pay these costs on their own.
Inability to Grasp the Full Extent of Assets
When a parent develops dementia, the decline in memory and judgment makes self-management of assets difficult.
There are many cases where a person forgets where they stored their bankbook, what insurance policies they hold, and so on, making it impossible to grasp the full picture of their assets.
As a result, many families find themselves unable to discuss the distribution of assets in inheritance and unable to move forward with inheritance procedures.
Tendency for Disputes Among Relatives
Dementia can also cause disputes among relatives.
Conflicts over assets in particular are common.
For example, some people mistakenly believe that "caregiving leads to a larger inheritance share."
However, in reality, when assets are divided upon a parent's death, there is no legal basis or system that allows someone who provided care to receive a larger share.
Please be aware that providing care does not necessarily mean receiving a larger inheritance.
Will a Bank Account Be Frozen if a Parent Develops Dementia?
Many people think about drawing funds from the parent's own bank account to finance their care.
However, account freezing may make it impossible to withdraw savings.
Let's explain when account freezing occurs.
When Does an Account Get Frozen?
There are two reasons an account may be frozen.
The first is when the account holder dies.
The bank freezes the account when it learns of the account holder's death.
The deceased's account becomes shared property, and all heirs must conduct an estate division conference.
Once it is decided who will inherit the deposit account and the procedures are completed, the account holder is determined and money can be withdrawn again.
The second reason is when a person's decision-making capacity has significantly declined due to dementia or similar conditions.
Without decision-making capacity, the risk of being caught up in troubles such as unauthorized use, embezzlement, or fraud increases.
For this reason, banks freeze accounts to prevent such troubles before they occur.
What Actually Happens When an Account Is Frozen?
When an account is frozen, the following actions become impossible.
· Withdrawing deposits
· Making deposits
· Canceling fixed-term deposits
· Changing fixed-term deposit terms
· Opening a safe deposit box
· Auto-payment of utility bills
Essentially, the account becomes completely unusable, causing problems such as the inability to withdraw money.
However, in the case of dementia, unlike death, a complete freeze does not occur.
While withdrawals and changes to contract terms become unavailable, pension deposits and automatic utility bill payments continue even after dementia onset.
Therefore, there is no immediate need to act.
Accounts Are Not Frozen Immediately
There are two occasions when a bank may freeze an account.
The first is when a family member informs the bank that the account holder has developed dementia.
There are cases where a person wants to withdraw cash from the account but has forgotten the account number.
In that situation, family or the person themselves would visit the bank to complete procedures.
If dementia is disclosed during that process, the account may be frozen.
The other occasion is when the bank determines that the person's "decision-making capacity has significantly declined."
If the account holder (parent) can handle deposits and withdrawals on their own, there is no problem.
However,
· The account holder (parent) cannot go to the bank in person
· They cannot state their name or date of birth
· They cannot sign in their own handwriting
In such cases, they may be deemed to lack decision-making capacity and the account may be frozen.
Developing dementia does not mean the account will be frozen immediately, but it is important to take action early.
Whether an Account Is Frozen Depends on the Financial Institution
If an account is frozen, all kinds of problems arise.
You may need to use your own money for caregiving instead of the parent's funds, and life can become financially difficult.
Some people may worry, "What if the account gets frozen?"
Some financial institutions offer flexible responses.
In response to the year-on-year increase in dementia patients, the Japanese Bankers Association announced its "Approach to Agency in Financial Transactions" in 2021.
By publishing the view that relatives can make withdrawals on behalf of the account holder when funds are to be used for medical expenses and similar purposes, individual banks have begun offering more flexible responses.
Understanding in advance how the bank your parent uses handles such situations will allow you to respond appropriately if dementia develops.
However, since money is involved, taking preventive measures before problems arise will allow you to handle urgent situations without panic.
After Account Freezing, Management by a Legal Guardian Is the Principle
Depending on the bank, a relative may be able to make withdrawals even after the account holder has developed dementia.
However, if the account is frozen, withdrawals become impossible.
Even if you bring documentation proving that you are the child of the account holder (parent) to the bank, you cannot lift the freeze—you will need to use the "adult guardianship system" to have it lifted.
What Is the Adult Guardianship System?
The "adult guardianship system" is a system in which the family court appoints a guardian to manage and protect a person's assets.
The adult guardian is not necessarily the parent's child.
Filing requires costs, and compensation must be paid to the adult guardian, which is why the adult guardianship system has not been widely utilized.
In addition to the adult guardianship system, there is also a "voluntary guardianship system" that allows a person to choose their own guardian while still healthy, in anticipation of the future.
While still capable of making independent decisions, a person can prepare for the onset of dementia by designating their chosen person as voluntary guardian—so if the parent names their child, the child becomes the voluntary guardian.
Who Actually Gets Selected as Adult Guardian
The family court selects the most suitable person from among candidates as adult guardian.
The selection is made from among those who do not fall under the disqualifying criteria set forth in Article 847 of the Civil Code.
According to statistics compiled by the courts, non-family professionals (attorneys and judicial scriveners) account for approximately 80% of all appointments.
Being the parent's child does not guarantee selection.
If you want to become the guardian as the parent's child, make use of the voluntary guardianship system in advance to have a guardian designated.
Rights Held by an Adult Guardian
An adult guardian holds three rights in total.
The first is the "right of representation."
They can enter into contracts on behalf of the person.
The second is the "right of cancellation."
The right of cancellation allows legal acts to be rescinded, enabling the cancellation of a contract when a parent has made an expensive purchase.
The third is the "right of ratification."
Even if the person purchased something themselves, if the price is appropriate, there is no problem.
If the guardian determines it is "not disadvantageous" to the person, they can ratify the purchase and make it a valid contract.
Compensation for Adult Guardians
Adult guardians take on a wide variety of tasks on behalf of the person, yet their compensation is modest.
Compensation for adult guardians averages around 20,000 to 60,000 yen per month, even for professionals such as attorneys and judicial scriveners.
In the case of relatives, compensation may be waived, so becoming a guardian does not mean receiving a large sum of money.
The Adult Guardianship System Is Also Useful for Estate Division Conferences
When an inheritance occurs, an estate division conference is held to discuss how to divide the estate for succession.
Having an adult guardian in place at that time can prevent disputes among relatives, allowing the discussion about inheritance to proceed smoothly.
What Is an Estate Division Conference?
An "estate division conference" is a forum for discussing who will receive how much of the estate.
The estate is not limited to savings deposits.
Land, stocks, securities, and other assets must also be discussed to determine who inherits what.
If a will exists, the estate is divided according to its contents; if there is no will, the heirs must discuss and negotiate among themselves.
However, there are many cases where discussions do not progress, such as when "someone refuses to participate" or "someone tries to impose only their own claims."
In such cases, an estate division mediation may need to be conducted when the conference fails to reach agreement.
If mediation also fails to reach agreement, a ruling is made and the judge decides how the estate will be divided.
Points to Note in Conferences Involving an Adult Guardian
If a parent with dementia is an heir, they may be unable to participate effectively in discussions.
In that case, if there is an adult guardian, they can attend the conference in place of the heir.
The conference must proceed to ensure that the statutory inheritance share is obtained to protect the person's assets and interests, so improper actions such as unilaterally renouncing inheritance are not permitted.
However, if both the person and the guardian are heirs, a conflict of interest may arise, making it impossible to proceed with the estate division conference.
In that case, it is necessary to file a petition with the family court to appoint a special representative.
The Process and Points to Note in Legal Guardianship Procedures
If decision-making capacity is already insufficient due to dementia, it is necessary to follow the legal guardianship system procedures to handle contract execution and asset management.
Let's confirm the process and points to note for legal guardianship procedures.
Procedure Process
The legal guardianship system begins with filing a petition at the family court, and the procedure is complete once it is registered at the Legal Affairs Bureau.
① Filing at the Family Court
A family member or a relative within the fourth degree of kinship becomes the petitioner and files a petition to commence guardianship at the family court.
A complete set of petition forms and related documents is submitted to the family court.
Obtain the petition forms and document package from the family court in advance and prepare them.
There are many documents to prepare, so be careful not to have any missing items.
② Review
A family court investigator conducts interviews with the petitioner and the guardian candidate, and investigates the submitted documents as well as the petitioner, the person, and the guardian candidate.
The main matters reviewed include the reason for the petition, the person's (parent's) background and medical history, their assets and income, and the guardian candidate's background.
In some cases, relatives are contacted to verify facts, whether any disputes exist among relatives, and information about the guardian candidate, via written or telephone inquiry (intent consultation).
③ Ruling
Once evaluation and investigation are complete, the family court reviews and decides whether to commence guardianship.
If the guardian candidate is deemed unsuitable or there are concerns about disputes among relatives, a third-party guardian or guardianship supervisor may be appointed.
Once a ruling is made on the petition, a ruling document notifying the petitioner and guardian of the decision is sent—please review it upon receipt.
④ Guardianship Registration at the Legal Affairs Bureau
Approximately two weeks after the ruling document is sent, the notification becomes finalized.
Afterward, the ruling's decisions are registered at the Legal Affairs Bureau.
The guardian candidate should begin their duties as guardian.
The person appointed as guardian must prepare an inventory of the person's (parent's) assets and submit it to the court within one month.
From that point on, regularly report the parent's mental and physical condition and the status of asset management to the family court and guardianship supervisor.
Documents Required for the Procedure
The documents required for the legal guardianship system procedure may differ depending on the family court in your area.
Therefore, check the required documents on the website of the family court where you will file the petition, or contact them directly.
There are generally no documents the petitioner needs to prepare in advance, but depending on the area, a family register or residence certificate may be required.
The documents required for legal guardianship system procedures are as follows.
· Family register and residence certificate for the person (parent) and guardian candidate (obtained at the municipal office)
· Medical certificate specifically for adult guardianship (request from attending physician or memory clinic)
· Medical evaluation request document (request from attending physician or memory clinic)
· Certificate of non-registration of guardianship (obtained at the Legal Affairs Bureau)
· Petition to commence guardianship (obtained at the family court and completed)
· Inquiry forms regarding the background, financial status, income, and expenditures of the person (parent) and guardian candidate (obtained at the family court and completed)
· Relative relationship diagram listing the person's (parent's) parents, spouse, children, siblings, etc. (obtained at the family court and completed)
[Documents proving the person's (parent's) assets]
· Real property certificate (obtained at the Legal Affairs Bureau)
· Bankbook or certificate showing recent deposit and withdrawal records
· Life insurance policy
· Stock and investment trust reports, etc.
[Documents proving the person's (parent's) income and expenditures]
· Pension amount notification, long-term care certification notification, disability certificate, etc. (sent from the municipal office)
· Property tax, income tax, and residence tax payment notices (sent from the tax office)
· Medical expense receipts and facility admission fee receipts for the most recent 3 months
Points to Note When Using the Adult Guardianship System
When using the adult guardianship system, keep the following points in mind.
· The guardian has an obligation to report the details of their duties to the family court annually or as needed
· If an attorney or judicial scrivener is appointed as guardian, an objection cannot be filed
· Once a guardian is determined, it is difficult to replace or remove them based on the family's wishes
· Asset management is entrusted to the guardian, and the wishes of other family members or the person themselves may not be easily reflected
· It may be necessary to pay compensation to the guardian
· There are costs involved in filing the petition, which the petitioner must bear
Compensation paid to the guardian is paid from the assets of the person under guardianship.
Basic compensation tends to increase as the managed assets grow larger, so measures for that will also be necessary.
In addition, the following costs are incurred for the petition, so the person becoming the petitioner must understand them in advance.
· Filing fee: 800 yen
· Guardianship registration fee: 2,600 yen
· Delivery and mailing costs: 3,270 yen (for guardianship petitions)
· Evaluation costs: approximately 100,000–200,000 yen
Be Mindful of Financial Institution Guidelines
Even without the adult guardianship system, there are cases where a relative other than the account holder can make withdrawals from an account.
Since this system's procedures are burdensome, few people use it, and there are cases where accounts have been frozen as a result.
For this reason, many financial institutions have limited acceptance of withdrawal requests from relatives who have not completed adult guardianship system procedures.
The conditions for accepting withdrawal requests are that the bank acknowledges the account holder's decline in decision-making capacity, and that it can be clearly proven that the funds will be used for the person's benefit, such as for medical expense payments.
The financial institution will conduct an interview and review the person's medical certificate and medical/care expense details before deciding whether to accept the request.
These guidelines differ by financial institution, so approval is not guaranteed.
First, before going through adult guardianship system procedures, check with your parent's financial institution how they will handle withdrawal requests from relatives if the parent develops dementia.
There Are Also Asset Management Methods Other Than the Adult Guardianship System
When a parent develops dementia, there are ways to manage assets other than the adult guardianship system.
Those methods are the "Daily Life Self-Support Program" and "asset succession trust."
Daily Life Self-Support Program
The Daily Life Self-Support Program is a support service run by the social welfare councils of each municipality.
It offers "daily financial management services" and "document custody services" for elderly people with dementia.
The daily financial management service involves having deposits withdrawn one to two times per week and receiving the funds at home.
The document custody service allows important documents such as bankbooks, pension certificates, rights documents, and personal seals to be deposited and managed.
Both services have conditions for use and are provided for a fee.
For more details, please contact your local municipality.
Asset Succession Trust
An asset succession trust is a service in which money is deposited with a bank or similar institution and arrangements are made in advance for the person or their family to withdraw it under preset conditions.
It can be used as a safeguard for cases where a person becomes unable to self-manage their assets due to injury, illness, or dementia.
By establishing an asset succession trust, even if a parent develops dementia and it becomes difficult to make withdrawals, the family can make withdrawals on their behalf under the preset conditions.
It is also possible to designate a recipient, so when the account holder passes away, the designated recipient can receive the funds.
This allows necessary funds for expenses such as funeral costs to be secured while omitting cumbersome inheritance procedures.
Pension Procedures After Adult Guardian Appointment
Once appointed as adult guardian, you will also be responsible for managing the parent's pension.
Accordingly, pension-related procedures are also required.
After appointment, visit the pension office or a neighborhood pension center to change the delivery address for notices sent to the pension recipient, the pension receiving institution, and the account name.
For the change procedure, submit a Change Application Form and a Basic Resident Register-based address update suspension/cancellation application (for adult guardians, etc.).
For the address change, the original "certificate of registered matters" issued by the Legal Affairs Bureau, or the "certified copy of the ruling document (copy acceptable)" and the original "certificate of ruling finalization" issued by the family court are required.
Measures That Can Be Taken Before an Account Is Frozen
If a parent's account is frozen due to dementia, it becomes impossible to withdraw funds for treatment and caregiving.
Take measures to prevent this from becoming a serious problem.
Family Trust Agreement
This is a contract in which, before decision-making capacity declines, a person voluntarily transfers rights such as financial management and contract execution to a designated person of their choosing.
Money deposited in a bank account under the family trust name can be managed by the designated family member without using the adult guardianship system.
Depending on the contract terms, it is also possible to manage asset investments that are not permitted under the adult guardianship system.
This contract incurs initial costs of approximately 500,000 to 1,000,000 yen, but unlike the adult guardianship system, there is no need to pay monthly compensation, so there is an advantage in that costs can be kept lower over the long term.
However, note that if dementia has already developed, depending on its severity, a family trust agreement may not be possible.
Voluntary Guardianship Agreement
This is a system in which, while still having decision-making capacity, a person decides in advance what they want their chosen voluntary guardian to handle on their behalf.
It is a contract executed by a notarized deed prepared by a notary public.
The voluntary guardian can be chosen by the person themselves, and can be not only a relative but also an attorney or judicial scrivener.
The contract terms can also be decided by the person, so they can maintain the lifestyle they desire even after developing dementia.
Additionally, since the family court appoints a voluntary guardianship supervisor, there is peace of mind in knowing that someone is monitoring whether the guardian is providing support as agreed upon.
Representative Card
A representative card is a cash card that family members can hold as representatives.
When dementia develops, there is a risk of losing the cash card needed for deposits and withdrawals.
If that happens, inconvenience arises when it becomes necessary to make a payment that requires a cash withdrawal.
With a representative card, family members can make withdrawals on behalf of the person and use the funds for medical expenses, living costs, and other payments.
Representative cards can sometimes be issued in multiple copies.
Having one made for each sibling's family means that having one family member manage the cash card can help prevent potential disputes.
Learning the Cash Card Storage Location and PIN
The representative card introduced above can only handle withdrawals.
For situations where management beyond withdrawals becomes necessary, having the parent share the cash card's storage location and PIN in advance provides peace of mind when the time comes.
Thinking ahead to after the parent loses decision-making capacity, it is also important to confirm the parent's wishes and preferences in advance regarding cancellation of fixed-term deposits and changes to contract terms.
Representative Designation System
Some banks have a representative designation system.
This is a system for designating a representative who can make withdrawals while the account holder's decision-making capacity has not yet declined.
The designated family member will be able to make withdrawals from the account even if the parent's decision-making capacity declines due to dementia or similar conditions.
This system is limited to counter withdrawals only, and the account holder's passbook and registered seal must be presented at the time of withdrawal.
Note that if the passbook or registered seal has been lost, even the designated recipient will not be able to make a withdrawal.
What the Family Should Decide Before a Parent Develops Dementia
Dementia can happen to anyone.
In order to realize the lifestyle and asset management the parent themselves desires, the family should decide various things together before onset occurs.
Notarized Will
If you want assets to be passed on in a ratio other than the statutory inheritance share, make use of a will.
Without a will, the heirs must decide the ratio among themselves, increasing the likelihood of disputes.
Leaving a will allows assets to be passed on to the children in the form the parent desires.
A notarized will is reviewed by a professional such as a notary public, enabling reliable succession.
Ending Note
An ending note is a notebook or letter in which a person records what they want to convey to family and those around them if something should happen to them.
It allows a person to look back on their life while organizing and leaving behind information about currently held assets and more.
Family members can use the information in the ending note to smoothly handle asset management and other matters.
Writing things in too much detail, such as PIN numbers, increases the risk of unauthorized use, so it is advisable to limit the content to what the family needs to manage assets without difficulty.
Inter Vivos Gift
Gifting existing assets to statutory heirs is also one option.
Since assets can be reliably passed on to heirs while the parent is still alive, the risk of disputes over inheritance later is reduced.
Inter vivos gifts cannot be made after dementia develops, so consult with the family early, decide on inheritance ratios, and execute the gift.
Note that some things that are not taxed in ordinary inheritance may be subject to taxes when gifted.
Please proceed with inter vivos gifts with that understanding.
Summary
As the population ages, the number of dementia patients is on the rise.
Because this is something that can happen to anyone at any time, families must know the necessary procedures and measures for when a parent develops dementia.
Parents themselves should also consult with family early about asset management and caregiving in preparation for developing dementia, and decide on a course of action.
Consulting in advance allows both the parent and the family to achieve asset management that everyone is satisfied with.
Since procedures such as the adult guardianship system can be complex and difficult to understand, it is also advisable to consult with specialists in asset management and official procedures, such as attorneys and judicial scriveners.
Frequently Asked Questions About Dementia and Real Estate
Q1. Can real estate be sold once dementia develops?
As dementia progresses, a person may be deemed to lack decision-making capacity, potentially invalidating real estate sales contracts. Use of the adult guardianship system becomes necessary.
Q2. When should a family trust be established?
It must be established while the parent is still healthy. Once dementia has developed, it is not possible to enter into a trust agreement.
Q3. What is the difference between the adult guardianship system and a family trust?
The adult guardianship system involves asset management under court supervision, while a family trust allows flexible asset management among family members. A family trust offers greater freedom.
