Financial Planning for Mental Incapacity: Antiquated Law in a Modern Financial Centre

Abstract

Hong Kong shares the predicament of most developed countries in facing a rapidly ageing society. Government statistics project that by 2041, almost one in three in Hong Kong’s population will be aged 65 or above. Combined with one of the lowest birth rates and also highest life expectancy in the world (in fact, the highest for women), the need for a comprehensive legal framework to enable the elderly to make financial planning for the vicissitudes of life has become imminent. For the general population, simple and affordable legal instruments such as the enduring powers of attorney are particularly useful. Yet, the Enduring Powers of Attorney Ordinance is based primarily on an English statute of 1985, which itself has been revamped a decade ago in 2005. In light of these concerns, the present paper will, first, examine inexpensive financial management services that are currently used by the elderly in Hong Kong; second, focus on the enduring powers of attorney with a view to identifying legal and practical impediments to their widespread use; and third, propose ways to reinvigorate the enduring powers of attorneys and align them with cultural practices in Hong Kong.