India has no comprehensive law for managing a person's finances and property after they lose mental capacity. According to reports from Mint, a stroke, dementia, or coma can strip a person of legal agency overnight, and unlike the US or the UK, India has no dedicated statute letting people plan for this moment in advance. The scale of the challenge is significant - the Longitudinal Ageing Study in India, 2023, found about 8.8 million Indians aged 60 and above living with dementia, representing a prevalence of 7.4%. The UNFPA India Ageing Report 2023 counted 149 million Indians aged 60 and above in 2022, projected to reach 347 million by 2050.
Indian law offers only fragmentary solutions to incapacity management. As reported by Mint, the Indian Contract Act, 1872, under Section 11, voids contracts made by a person of unsound mind but provides no advance planning route. The Mental Healthcare Act, 2017, allows nomination of a treatment representative for healthcare only, while the Rights of Persons with Disabilities Act, 2016, lets courts appoint limited guardians for benchmark disabilities but excludes most dementia and stroke patients. The National Trust Act, 1999, provides guardianship only for four listed conditions - autism, cerebral palsy, mental retardation and multiple disabilities - and the Powers of Attorney Act, 1882, allows appointment of agents but remains silent on whether agency survives incapacity.
Because no dedicated statute exists, families must turn to courts for guardianship. According to Mint, in 2020, the Delhi High Court allowed only a spouse or children to guard a comatose woman whose Provident Fund savings a bank had withheld, ordering full asset disclosure. In 2025, the Bombay High Court ordered a medical board to examine a 78-year-old dementia patient before ruling on her children's guardianship plea, a process that took months. Currently, four tools are available in India: General Power of Attorney with survival clauses, Mental Healthcare Act nominations, Advance Medical Directives, and private family trusts under the Indian Trusts Act, 1882.
A private family trust under the Indian Trusts Act, 1882, emerges as the most effective solution since assets legally belong to the trust, not the individual. As reported by Mint, when a person transfers assets like houses, fixed deposits, or stock portfolios to a trustee, incapacity freezes nothing as the trustee, still of sound mind, continues signing cheques and settling bills. A well-drafted deed includes an incapacitation clause triggered by two doctors' certificates that the settlor cannot manage their affairs, allowing the trustee to pay hospitals and caregivers directly without court guardianship. This approach, combined with a living will and Mental Healthcare Act nomination, comes closest to the single, enforceable system offered by durable power of attorney in the US or UK. A General Power of Attorney with survival clauses lets a chosen agent manage accounts and property, though banks and registrars still treat such clauses inconsistently. An Advance Medical Directive, the living will be recognised in Common Cause versus Union of India, 2018, records a person's end of life wishes and was simplified by the Supreme Court in 2023, though it applies only to end of life care.
