Shanghai has initiated a pilot program aimed at improving eldercare services by integrating advanced guardianship with eldercare service trusts. The initiative, which began in 2026, seeks to provide better protection for seniors’ assets while ensuring continued access to funds for their care and daily needs, particularly for those facing cognitive decline or physical disabilities.

Traditionally, guardianship rights and property rights have been closely linked, which can lead to asset misappropriation and conflicts of interest. The new framework separates these rights by introducing designated trustees for managing property and establishing prearranged payment mechanisms. This approach allows a trusted individual or organization, such as an appointed guardian, to manage the senior’s assets and instruct trustees on eldercare-related expenses once the senior becomes incapacitated.

Zhu Junsheng, former research director at the Research Center for China Insurance and Pension Finance at Tsinghua University PBC School of Finance, emphasized the significance of this shift, noting that it addresses practical challenges faced by seniors who may be unable to spend their own funds despite having assets like bank deposits or real estate. The pilot program is designed to benefit vulnerable groups including seniors living alone, families who have lost their only child, and elderly parents caring for disabled adult children.

Shanghai authorities reported that by the end of 2025, approximately 5.84 million residents aged 60 and above—making up nearly 37.6 percent of the city’s registered population—presented growing demands for eldercare and financial management solutions. In response, Shanghai International Trust Co. (Shanghai Trust) has developed a service package that combines guardianship arrangements with trust frameworks to meet these needs.

One illustrative case involves an 81-year-old man from Shanghai’s Huangpu district who, as the sole caregiver of his disabled wife and mentally challenged son, has arranged for advanced guardianship through an agreement with his community residents’ committee and a notary office. He transferred his assets into a trust managed by Shanghai Trust, which is instructed to cover living and nursing care costs according to his directives. This setup delineates caregiving responsibilities clearly and ensures continuity of care should he become incapacitated or pass away.

Chen Bing, general manager of Shanghai Trust, described the eldercare service trust as an open, collaborative platform that integrates financial and social services, enhancing access to eldercare. Zhu further highlighted that the key advancement lies in combining eldercare service trusts with the city’s eldercare service system, facilitating a coordinated approach to elder support.

This pilot program reflects Shanghai’s proactive strategy to address the complex challenges of pension finance and eldercare in its aging population, potentially serving as a model for similar initiatives elsewhere.