Placeholder image


Robyn Wynne
Legal Advisor


For any family dealing with a situation where one of their own becomes mentally incapacitated, perhaps as a result of a severe stroke or the later stages of Alzheimer’s or another form of dementia, this is a distressing time. There are many questions to ask and considerations to bear in mind when dealing with an instance where a family member has lost their capacity to make their own financial decisions.

As part of the Citadel family, our role will be to support you during this difficult time by providing information about the legal constraints imposed on Citadel in such circumstances. The information contained in this article is largely of a legal nature and is designed to help you navigate the first steps in this complex transition, explaining the constraints placed on Citadel and your family.


In South Africa, a major person (anyone over 18 years of age) is presumed to be mentally and legally competent to manage his or her own affairs. However, as soon as a person becomes unable to manage their own affairs, South African law restricts contracting with that person with the aim of protecting them from exploitation.

The effect of this is that a person who has no legal capacity cannot appoint an agent to manage their financial affairs. So any agency agreements (such as your Citadel mandate or a power of attorney) in place prior to the person losing their legal capacity will automatically cease to have effect, even if the contrary has been stated in the terms of any of these agency documents.


Many people believe that a power of attorney granted to them over family member’s (the principal’s) affairs will continue to be valid in the face of mental incapacity. However, as soon as the capacity of the principal to act themselves terminates, so does the power of attorney.

Some countries have solved this problem by introducing an “enduring power of attorney”, which will remain effective even if the person granting the power of attorney loses mental capacity at a later stage. This is not the case in South Africa, despite recommendations from the law commission to do so first dating back to 1988.

That said, an enduring power of attorney also has its pitfalls. In 2007 the United Kingdom replaced the old enduring powers of attorney, and started using lasting powers of attorney with added safeguards in place to protect those people granting lasting powers of attorney from fraud and theft. Despite this, legal commentators believe theft and fraud remain a very real problem.


The Citadel mandate gives Citadel discretionary power to manage the investments of the client, so it is an agency agreement. This means the Citadel mandate will terminate should a client become incapacitated and Citadel will no longer be able to act on behalf of such a client, or on the instruction of their agent appointed under a power of attorney.

So, in order for the family to move forward with the management of the financial affairs of an incapacitated person, they first need to appoint someone to manage the estate of the incapacitated person.


South African law requires a person to be appointed to manage the financial affairs and assets of an incapacitated adult. Only authorised people are permitted to act on behalf of the adult and, in South Africa, there are only two options available when appointing someone to manage another adult’s affairs: a “curator bonis”, who is appointed by a High Court, or an administrator appointed under the Mental Health Care Act, 17 of 2002.

Let’s take a closer look at both of these options.

Curator bonis:

This involves a lengthy and expensive two-step process, which forms part of an application made in terms of Rule 57 of the Rules of the High Court.

The first step is to appoint someone to represent the person to be placed under curatorship in litigation, usually an advocate. This person is referred to as a “curator ad litem” and their role is to make such inquiries as they deem necessary including meeting with the person to be placed under curatorship, explaining the application to them, speaking to the family, then reporting back to the court. The “curator ad litem” is there to represent the best interests of the incapacitated person. The Master also compiles a report for the court, after receiving the curator ad litem’s report, and makes recommendations to the court on whether the application should go ahead or not, as well as on the suitability of the proposed curator bonis.

Once this step has been finalised, an application for a curator bonis (this translates to a good caretaker) will be made to court. A curator bonis will be appointed by the court if it is satisfied that it is the right thing to do, to take care of the estate of the person in question. The curator bonis is only there to manage and protect the person’s financial and property interests and obtain approval from and report to the Master of the High Court on the finances of the person. The curator cannot make personal decisions on behalf of the person. For example, they may not institute action for divorce or consent to medical treatment on behalf of the person.

Only once a curator bonis has letters of curatorship granted by the Master of the High Court, do they have permission to deal with the incapacitated person’s assets. The letters of curatorship will include the authority of the curator and may include limitations on the authority to invest, although the powers of investment are usually wide. The court order, if it includes any limitation to make investments, is made on the input of the curator bonis and other evidence presented about the assets of the person under curatorship. Citadel will need to receive a copy of the letters of curatorship in order to take instructions from the curator bonis.


The appointment of an administrator under the Mental Health Care Act, to manage the property of an incapacitated person is made on application to the Master of the High Court. The incapacitated person must have been positively diagnosed as being mentally ill or be a person with a severe or profound intellectual disability.

Since there is no High Court application, this process is far less costly than an application to appoint a curator. The family can work directly with the Master; although they should consult their attorneys for assistance with the application.

There are no application fees charged by the Master, however, if the value of the person’s estate exceeds R200 000 and the income is above R24 000 per annum, then the Master must conduct an investigation before an administrator is appointed. The costs of this investigation will be borne by the estate of the person placed under administration.

As is the case for a curator bonis, the administrator cannot make personal decisions for the incapacitated person, only manage the finances of the person. Citadel will require a copy of the letters of appointment in order to take instructions from the administrator.

One of the practical problems with this type of appointment is that the Master can limit the types of investments that can be made by the administrator; for example, restricting investments to interest-producing instruments only. This sort of limitation could prove problematic for many of our clients. The process, originally established to deal with smaller estates, does not require a hearing or a judge to make the order. As a result, the limitations on investments given as a result of this process may make provision for a more conservative investment universe.


If you find yourself in the distressing position where a family member is in this situation, then the most effective starting point is to seek advice from your attorney in order to determine the best way forward. While this is not a process we can guide you through directly, as always Citadel is on hand to assist where we are able.