1. IF there are no legal heirs left alive, THEN the Property / Assets of the mentally deranged person, would automatically be devolved to the State Govt. There is no other way.
2. A mentally deranged person, is legally NOT competent to make any Will, POA, Trust, Agreement or any Contract AND THUS cannot appoint ANYBODY whosoever to manage his property / assets, when alive or after death.
3. Parents or relatives or other legal heir (under the HSAct) may stake their claim / role in succeding / managing the property of the mentally deranged person, BUT ONLY after getting a court decree to that affect.
Keep Smiling .... Hemant Agarwal