In June of this year, the Shanghai Financial Regulatory Bureau, the Shanghai Civil Affairs Bureau, the People's Bank of China Shanghai Branch, and the Shanghai Municipal Party Committee's Financial Office jointly issued the "Notice on Innovatively Conducting Pilot Projects for Elderly Care Service Trusts" (hereinafter referred to as the "new policy"). Institutions such as Shanghai Trust, Huabao Trust, and Jianyuan Trust are among the first to participate in the pilot.

Trusts have long been perceived by many as high-end wealth management products with entry thresholds starting at millions of yuan, seemingly having little connection with ordinary people. However, this new policy pilot in Shanghai aims to bring elderly care service trusts into the homes of everyday citizens. What exactly is an elderly care service trust? What common elderly care challenges can it help ordinary people solve? How can it achieve inclusivity? Reporters visited pilot institutions and heads of relevant district civil affairs bureaus to find out.

The Elderly Care Challenge of an Octogenarian

The resolution of the elderly care challenge for 81-year-old Mr. Zhang from Huangpu District, Shanghai has recently garnered attention and coverage from several media outlets. The elderly man shoulders a heavy family burden: his disabled wife requires long-term hospitalization, and his son suffers from a mental disability. After being appointed by the court as the sole guardian for both family members in succession, the elderly Mr. Zhang was deeply worried: If he himself becomes incapacitated, loses cognitive ability, or passes away, who will take care of his wife and son? How can the family's assets be managed to ensure their livelihood for the rest of their lives?

Mr. Zhang's elderly care predicament could not be solved by an individual or a single department. The Huangpu District Civil Affairs Bureau, in collaboration with Ruijin Erlu Sub-district, combined the professional expertise of law firms, notary offices, and trust institutions to tailor an integrated solution of "advance directive guardianship + special needs trust" for him.

"The advance directive guardianship system and the elderly care service trust provide dual safeguards for the personal care and property security of Mr. Zhang's family," said Wang Huijuan, Deputy Director of the Huangpu District Civil Affairs Bureau. Mr. Zhang's case is precisely the first nationwide full-process safeguard plan of "advance directive guardianship + special needs trust" for special families, and it also serves as a model for promoting elderly care service trusts in Shanghai.

The specific approach is as follows: At the personal care level, "in accordance with his personal wishes, staff established a three-tier hierarchy of guardians for Mr. Zhang: the first tier was entrusted to his friend, the second tier to this friend's son, and the third tier to a social organization approved by the neighborhood committee," introduced Shao Hui, Party Branch Secretary of the Shanghai Luwan Notary Office. Furthermore, it was explicitly stated that the neighborhood committee serves as the guardian supervisor. If a dispute over guardianship arises, the neighborhood committee will act as the temporary guardian, with the notary office issuing the temporary guardian certificate promptly. If ultimately there is no suitable guardian, the neighborhood committee will serve as the "backstop" official guardian, building the final line of defense for the lives of Mr. Zhang's family.

In terms of property management, Mr. Zhang injected family assets into a special needs trust and personally drafted a "Letter of Wishes," clarifying the direction and standards for the use of the property. In his "Letter of Wishes," he proposed that all active life-saving measures be taken for himself; treatment should prioritize top-tier hospitals, and he had his own ideas about the order of preference for these hospitals; he specified quality requirements for the nursing homes chosen for his wife and son; and he detailed the standards for his wife's nursing costs, his son's medical expenses, and daily living expenses in the list.

Wu Haibo, Deputy General Manager of Shanghai Trust, explained to reporters that this trust scheme fully respects Mr. Zhang's wishes and implements a tiered instruction management mechanism. While Mr. Zhang is conscious and possesses full civil capacity, instructions for asset use are issued directly by him. If Mr. Zhang becomes incapacitated, loses cognitive ability, or passes away, the funds will be disbursed by the guardian he designated in advance, in accordance with the "Letter of Wishes." Fund disbursements must strictly follow the standards in the list, and the purpose cannot be altered arbitrarily.

Addressing the Shortcomings of Advance Directive Guardianship

Mr. Zhang's elderly care dilemma is not an isolated case. By the end of 2025, Shanghai's registered population aged 60 and above reached 5.8438 million, accounting for 37.6% of the total population. Among them, there are over 400,000 elderly individuals with disabilities or cognitive impairments, over 300,000 living alone, and the number of "elderly caring for the disabled" families continues to grow. The lack of elderly care services and inaccessible property management have become concerns for many seniors.

In 2025, Shanghai issued relevant trial opinions on advance directive guardianship work, taking the lead in exploring the institutional path for elderly individuals to autonomously select their guardians. Recently, Shanghai also released the "Shanghai Guidelines for Elderly Advance Directive Guardianship Work (Trial)," providing clear and actionable specific process guidance for willing elderly individuals and their families.

However, industry insiders frankly admit that traditional advance directive guardianship models have significant shortcomings. A guardian can simultaneously control both care and property, which, in the absence of third-party constraints, easily leads to moral hazards. In practice, cases have occurred where guardians withheld or deducted elderly care funds, replacing high-end nursing homes with inferior facilities; disposed of elderly individuals' property privately, transferred deposits, and appropriated assets for themselves; or even passively performed guardianship duties, using delayed care as leverage to pressure the elderly into disposing of assets.

"The new policy addresses the shortcomings of traditional advance directive guardianship. Its core innovation lies in constructing an elderly care service chain of 'advance directive guardianship + elderly care service trust + elderly care institution,' achieving the separation and checks-and-balances of the three functions of managing people, managing money, and managing services," said Wu Haibo.

Specifically, the advance directive guardian is only responsible for arranging medical care and daily living assistance for the elderly individual after they become incapacitated or lose cognitive ability, and does not have access to the trust's dedicated account funds or the authority to dispose of assets. The trust company, as the asset manager, places the elderly individual's assets into an independent, closed dedicated account and strictly disburses funds according to the "Letter of Wishes" drafted in advance by the elderly individual. Formal elderly care institutions selected and included in the civil affairs department's database can directly connect to the trust's direct payment channel with genuine and valid service documents, ensuring transparency and traceability throughout the process.

"Under this model, even if the elderly individual completely loses cognitive ability, medical, nursing, and related expenses can still be disbursed accurately, effectively safeguarding the basic rights and interests of the elderly," said the official.

Scenarios Also Cover Pre-retirement Populations

The new policy identifies elderly individuals with advance directive guardianship, solitary seniors, single-child families in distress, and "elderly caring for the disabled" families as key service targets. Shanghai Trust recently helped a family with special circumstances resolve their worries. A middle-aged couple has a son with autism. For years, they have taken their son to various care institutions, only to repeatedly encounter situations where institutions closed due to poor management. The couple has always worried about who will care for their child after they pass away.

To address this, they joined with several parents in similar situations to jointly create a specialized autism care institution. Simultaneously, they connected with a trust company to establish a dedicated elderly care trust, injecting their own assets into the trust's dedicated account. In the future, even after the couple passes away, the trust funds will continue to disburse operational and nursing fees to the care institution according to the pre-drafted "Letter of Wishes," building a lifelong, stable care safeguard for their child.

"However, elderly care service trusts are not limited to these special needs groups. Elderly individuals with children, as well as single individuals, childless middle-aged groups, and other pre-retirement populations can also obtain elderly care security through elderly care service trusts," said Wu Haibo, Deputy General Manager of Shanghai Trust.

The first nationwide elderly care trust advance directive payment business implemented by Shanghai Trust originated from the needs of an elderly couple with children. This couple is in good health and possesses independent decision-making capacity, and both have chosen to reside in a nursing home. However, the elderly couple did not want to entrust their elderly care expenses to their children for safekeeping. It's not that they distrust their children, but they feel that "daily nursing and medical expenses occur frequently, and having to ask their children for money each time is inevitably inconvenient."

They commissioned Shanghai Trust to establish an elderly care service trust, stipulating that the trust directly transfers over 8,000 yuan per person per month in nursing fees to the nursing home. The entire fund flow process is autonomous and controllable, without needing to rely on their children. The two elderly individuals feel that this approach both preserves their financial autonomy in their later years and simplifies the fund disbursement process.

Single individuals and childless middle-aged groups can also consolidate various assets such as cash and property through a trust: during healthy periods, the assets can be used for daily elderly care and rehabilitation consumption; after passing away, the remaining assets can be directed to be inherited by relatives or friends or donated to public welfare institutions according to the individual's wishes.

The new policy also emphasizes the inclusivity of elderly care service trusts. The elderly care service trust products launched by trust companies participating in the pilot have significantly lowered the establishment threshold. Taking the products launched by Shanghai Trust as an example, they cover the pre-retirement needs of different ages and family structures. Some start at 300,000 yuan and 1 million yuan, while others start at 50,000 yuan, primarily for emergency medical purposes, allowing ordinary working-class families to configure them according to their needs.

Recently, several media outlets reported: a 44-year-old single man in Shanghai suddenly fell seriously ill and fell into a coma. His mother wanted to withdraw his deposits to pay for the high treatment costs but was hindered due to a lack of court guardianship documents, having to go through judicial procedures to establish rights. In fact, a 50,000 yuan emergency medical trust could have preemptively avoided such risks.

"When the entrustor is healthy, they can designate a trusted family member as the fund applicant, agreeing that medical expenses can be settled officially upon presentation of a hospital critical illness certificate, with funds earmarked for specific use, greatly simplifying the emergency process," said Wu Haibo.

Real estate, equity, and other non-liquid assets and equity-type assets can also be included in elderly care trusts, opening up a new path of "house-for-pension + trust trusteeship." Shanghai Trust has already implemented relevant cases where the entrustor includes their own property in the trust. During their lifetime, they retain full use rights of the house, and rental income generated from the property can supplement daily elderly care expenses. After passing away, the property will be distributed according to the trust's wishes, both revitalizing the value of the real estate and broadening the sources of elderly care funds.

Policy Innovations Break Implementation Bottlenecks

The value of an institution is ultimately reflected in its implementation. Industry insiders told reporters that the new policy has many innovations, establishing a comprehensive framework for the standardized operation of elderly care service trusts.

Firstly, it sets regulatory red lines for elderly care service trusts, clearly categorizing them as asset service trusts and strictly prohibiting the promotion of asset management trusts under the name of elderly care service trusts.

"The new policy downplays the wealth management investment attributes of elderly care service trusts, instead focusing on ensuring the standardized use and precise disbursement of elderly care funds, solving the problems of 'how the money should be spent and who it should be spent on,'" introduced Fu Yuxiang, Head of the Strategic Development Department at Shanghai Trust. It is understood that funds in the trust account are only allocated to low-risk, stable products, with all returns retained in the trust account.

Secondly, it connects service channels. The new policy indicates that the civil affairs department will lead in building a platform for selecting high-quality elderly care service institutions, incorporating various service providers such as nursing homes, community elderly canteens, aging-adaptation modification institutions, and companion diagnosis and bathing services into the platform, forming a comprehensive service network.

"Will the nursing home they move into run away? What if the nursing home provides poor service? These are also concerns for the elderly. The new policy stipulates that the government will establish a 'whitelist' of service institutions, and trust institutions will only make payments to service providers on that list."

Finally, it created the mechanisms of "advance directive payment" and "trust property advance directive manager." Under the traditional trust model, if the entrustor suddenly becomes incapacitated and unable to express their will, the fund payment chain can easily break, causing the elderly care funds to be "frozen." The new policy clarifies that the entrustor can designate a trusted natural person or organization in advance as the "trust property advance directive manager." After the entrustor becomes incapacitated, this manager can, based on the trust contract and the "Letter of Wishes," send payment instructions to the trust institution for paying elderly care and medical-related expenses.

"This innovation can prevent the trust from reaching an impasse. If the entrustor suddenly becomes incapacitated and unable to express their will, establishing a guardian requires capacity assessment and court recognition, which takes time. The establishment of a 'trust property advance directive manager' can ensure the continuity of trust payments."

Regarding the fees for elderly care service trusts, reporters learned that if there are special needs, such as different requirements in contract terms, texts, etc., requiring customized services from the trust company, fees are negotiable. However, for standard versions, the management fee standards are very affordable and can be fully borne by ordinary families.

Promotion Still Needs to Overcome Multiple Challenges

However, reporters found that although this inclusive elderly care trust system has opened a new path for elderly care planning, numerous practical hurdles still need to be overcome for its widespread promotion.

The first hurdle lies in the tax threshold for including real estate in trusts. If citizens want to include their own housing or equity in trust management, the property transfer process will simultaneously generate various taxes and fees such as deed tax and value-added tax. Current policies have no special reductions or support. Roughly calculating, for a standard residence with a market value of 3 million yuan, establishing the trust would incur tens of thousands of yuan in additional taxes and fees. Families considering house-for-pension plans often abandon the idea after calculating the costs.

The second is the very small number of professional social organizations capable of stably undertaking advance directive guardianship services in the long term. Shanghai is currently accelerating the cultivation of a batch of standardized institutions to fill the supply gap in guardianship services.

The third is the insufficient public awareness of this entirely new elderly care service product, especially among some elderly groups who may even harbor resistance due to negative impressions from past wealth management experiences. A frontline trust salesperson admitted frankly that during daily consultations, most people cannot distinguish between elderly care service trusts and traditional wealth management, requiring deep cultivation in awareness-raising work.

The fourth lies in the fact that a sustainable industry operation model has not yet taken shape. Currently, the inclusive trusts launched for ordinary families only charge basic management fees, and trust institutions earn minimal profits from individual transactions. The industry needs to explore long-term profitable pathways.