Balance protection, support for bank customers suffering from dementia

The Japanese Bankers Association (JBA) has compiled its views on the money deposited by customers with dementia. The JBA says that even relatives who do not have the legal authority to represent a customer will be able to withdraw money on behalf of that person for certain purposes.

Currently, banks in principle do not accept requests from relatives to withdraw money if the customer’s intentions cannot be confirmed.

As a result, there have been cases in which relatives caring for a person have been unable to withdraw money from that person’s account and have had to cover medical expenses themselves. There have been calls to reduce this burden.

The number of people with dementia is expected to reach about 7 million by 2025, or one in five elderly people. There will be more relatives to facing difficulties related to the management of their assets.

The issue is when should relatives be allowed to withdraw money to care for elderly people with dementia.

There should not be incidents in which money is withdrawn without permission even though the account holder has sufficient cognitive ability, or in which someone loses their property because another person takes advantage of the decline in their cognitive ability.

The JBA says that methods to determine the cognitive ability of account holders include confirmation via a medical certificate from a doctor, and interviews with the account holder and their doctor.

Regarding the purpose for which withdrawals are meant to be used, the JBA says this is limited to “cases in which it is clear that the money will be used for the benefit of the account holder.” It is assumed that the money will be used for medical costs and nursing care expenses. This is because it is relatively easy to verify the purpose of the money’s use through such evidence as bills from hospitals and facilities for the elderly.

It is difficult for banks to objectively evaluate whether a withdrawal is in the best interest of the account holder when the withdrawal is large and used for overall living expenses. There are limits on the transactions banks can conduct with people who do not have the legal right to represent an account holder.

The JBA’s basic policy is to urge the use of the adult guardianship system under the Civil Code and other legislation.

In the legal guardianship system, people including judicial scriveners, certified social workers and relatives are appointed by a family court to act as guardians to manage accounts and conclude contracts related to the welfare of a certain individual. It is a system aimed at realizing the effective use of assets while ensuring the safety of those assets.

It is appropriate for the JBA to allow banks to deal in a “very limited capacity” with relatives who do not have the right of representation.

The legal guardianship system is little known, and use of it has not been increasing. The government should make the system more user-friendly and heighten its efforts to publicize and promote use of the system in cooperation with local governments.

Everyone is at risk of having their ability to make decisions deteriorate as they age. It is also important for relatives to discuss how to manage money while the person is still in good health.

— The original Japanese article appeared in The Yomiuri Shimbun on March. 7, 2021.