South Korea Launches Pilot Program for Public Trust System to Manage Dementia Patients' Assets

A pilot program began on Wednesday for a public service that manages the assets of dementia patients whose decision-making ability has declined. The initiative marks the first step toward introducing a public trust system for such assets. As Korea's population ages rapidly, the number of dementia patients age 65 or older is expected to exceed 1 million this year. The assets they hold were estimated at about 154 trillion won ($104 billion) as of 2023 and are expected to continue increasing. Without proper management, these assets can be misused or left idle. Patients may fall into poverty or become targets of fraud and financial exploitation. In some cases, they are unable to use their own money when it is most needed. A widely cited case involved a dementia patient in his 90s whose cash savings, amounting to tens of millions of won, were later discovered in a discarded treadmill. If such situations are neglected, the consequences can extend beyond individual hardship and place a broader burden on families and the state. A public guardianship system for dementia patients was introduced in 2018, but it has proven difficult for guardians to manage assets in a professional manner. Private-sector trust products are largely designed around inheritance and require enrollment while individuals still retain full decision-making capacity. These limitations underscore the need for a reliable public mechanism to manage assets for those who can no longer do so themselves. Under the pilot program, the National Pension Service signs trust agreements with patients or their families, provides living and care expenses based on individualized financial plans and handles any remaining assets through inheritance procedures. The program will initially target elderly dementia patients receiving basic pensions and is expected to expand gradually. The government plans to run the pilot for two years before launching a full-scale program in 2028. The pilot should be used to assess the effectiveness of the public trust system and identify areas for improvement. Although it is currently led by a public institution, the system should eventually be linked with private financial firms to combine public credibility with professional asset management expertise. Authorities must also ensure that the system does not conflict with existing inheritance or guardianship frameworks while continuing to update legal and institutional arrangements for an aging society.