Lasting Power of Attorney (LPA) Services in Singapore

Introduction

In life, unforeseen events can occur, causing sudden incapacitation and rendering individuals unable to manage their personal and financial affairs. Whether due to a motor accident, illness, or the natural progression of old age, the loss of mental capacity can lead to significant challenges for individuals and their families. To address this concern, Singapore law provides a legal framework known as the Lasting Power of Attorney (LPA), which allows individuals to plan ahead and appoint trusted individuals to make decisions on their behalf in the event that they are no longer able to do so.

This article explores the importance of Lasting Power of Attorney in Singapore and discusses its key aspects, including the process of advising, drafting, and executing this crucial legal document.

Understanding Lasting Power of Attorney (LPA):

The Lasting Power of Attorney is a legal instrument that enables an individual, known as the “donor,” to appoint one or more persons (referred to as “donees”) to make decisions on their behalf in the event they lose mental capacity. These decisions can relate to personal welfare matters, such as healthcare and living arrangements, as well as financial affairs, including property management and financial transactions.

Importance of Lasting Power of Attorney:

Ensuring Continuity in Decision-Making:

By establishing an LPA, individuals can ensure that their affairs are managed by someone they trust, even if they are unable to make decisions independently. This is particularly important in situations where the main or sole breadwinner of a family becomes suddenly incapacitated. The appointed donee(s) can step in promptly to manage financial matters, pay bills, and take care of other essential responsibilities, preventing potential disruptions and further financial hardship for the family.

Protection against Unregulated Service Providers:

It is crucial to seek professional legal advice when creating an LPA. While some will writing companies or estate planners may offer assistance, they may lack the necessary qualifications and expertise to provide accurate and legally sound advice. By consulting qualified legal professionals, such as the lawyers at IRB Law, individuals can ensure that their LPA is drafted in accordance with Singapore law, safeguarding their interests and protecting against potential pitfalls.

The Process of Advising and Drafting Lasting Power of Attorney:

Identifying the Need for an LPA:

The first step in creating an LPA is recognizing the need for such a document. It is essential to consider personal circumstances, family dynamics, and the potential risks of an individual losing mental capacity. Engaging in open and honest conversations with loved ones can facilitate this decision-making process.

Seeking Professional Legal Advice:

To ensure the LPA accurately reflects one’s intentions and meets all legal requirements, seeking advice from an experienced lawyer is highly recommended. Legal professionals specializing in estate planning and LPA matters— such as IRB Lawyers— can provide personalized guidance, explain the legal implications, and address any concerns or queries.

Appointment of Donee(s):

The appointment of a suitable donee(s) is a crucial aspect of the LPA. Donees should be individuals who possess the necessary qualities, trustworthiness, and capabilities to make decisions in the donor’s best interests. It is important to consider potential conflicts of interest and discuss the responsibilities/powers entrusted to the donee(s) before finalizing the appointment.

Drafting and Execution of LPA:

Appointed lawyers will draft the LPA document, ensuring compliance with Singapore law and reflecting the donor’s wishes accurately. The document should contain relevant details, including the donor’s personal particulars, the appointed donee(s), the scope of powers granted, and any specific instructions or restrictions. Once the document is prepared, it must be signed and executed in the presence of a Certificate Issuer, who certifies that the donor understands the nature and implications of the LPA.

Registering the Lasting Power of Attorney:

To ensure the effectiveness and enforceability of the LPA, it is mandatory to register it with the Office of the Public Guardian (OPG) in Singapore. Registration provides a legal framework for the supervision and protection of the donor’s interests, as well as an avenue for third parties to verify the validity and authority of the appointed donee(s).

Period of Effectiveness and Revocation of LPA:

The LPA remains effective until the donor’s death, unless it is revoked or terminated earlier. Donors are able to revoke or amend the LPA at any time, provided they have the mental capacity to do so. In cases where concerns arise about the donee(s)’ suitability or potential abuse of powers, interested parties can apply to the court for the LPA’s suspension, revocation, or replacement of the donee(s).

Singapore Laws Relevant to Lasting Power of Attorney:

The Lasting Power of Attorney (LPA) in Singapore is governed by the Mental Capacity Act (MCA). The MCA provides the legal framework for individuals to plan ahead and appoint donees to make decisions on their behalf in the event of mental incapacity. It ensures that the interests and welfare of the donor are protected while granting the necessary powers to the appointed donee(s).

Recent Amendments to Singapore Laws:

In recent years, several amendments have been made to the MCA to enhance the effectiveness and clarity of the LPA framework. Notably, the following key amendments have been introduced:

Mental Capacity Regulations (MCR) 2020: The MCR 2020 provides detailed rules and procedures for various aspects of the LPA, including the execution and registration process, fees, notifications, and other administrative matters. These regulations aim to streamline and standardize the processes associated with the creation and registration of LPAs.

Presumption of Capacity: The MCA introduced a “presumption of capacity” principle, which emphasizes that individuals are presumed to have the mental capacity to make decisions unless proven otherwise. This shift in approach ensures that individuals are empowered to exercise autonomy and make decisions in their best interests.

Enhanced Safeguards and Supervision: The MCA introduced stronger safeguards and supervision mechanisms to protect the interests of donors. These include the requirement for a Certificate Issuer to confirm the donor’s understanding and execution of the LPA, as well as the mandatory registration of LPAs with the Office of the Public Guardian (OPG). These measures enhance transparency, accountability, and third-party reliance on the validity and authority of LPAs.

Professional Donees: Amendments to the MCA now allow for the appointment of professional donees, such as lawyers or accountants, who can act on behalf of donors in managing their financial affairs. This provides individuals with more options and flexibility in selecting suitable donees based on their specific needs and circumstances.

Frequently Asked Questions about LPA:

What is a Lasting Power of Attorney (LPA)?

Lasting Power of Attorney is a legal instrument that allows individuals to appoint donees to make decisions on their behalf in the event of mental incapacity.

Who can create an LPA?

Any individual who is at least 21 years old and has mental capacity can create an LPA in Singapore.

Can I appoint more than one donee in my LPA?

Yes, you can appoint multiple donees, and you have the option to specify whether they can act jointly or separately.

Is it necessary to engage a lawyer for creating an LPA?

While it is not mandatory, seeking legal advice from a qualified lawyer is highly recommended to ensure compliance with Singapore law and avoid potential pitfalls.

Can I appoint a family member as my donee?

Yes, you can appoint a family member as your donee, provided they are at least 21 years old and have mental capacity.

What powers can be granted to the donee(s) in an LPA?

The powers granted to the donee(s) can include personal welfare matters, such as healthcare decisions, and financial matters, such as property management and financial transactions.

Can I include specific instructions or restrictions in my LPA?

Yes, you can provide specific instructions or restrictions within the LPA to guide the donee(s) in their decision-making.

Can I change or revoke my LPA after it has been created?

Yes, you can revoke or make changes to your LPA as long as you have mental capacity. This can be done by following the prescribed procedures under Singapore law.

Is registration of the LPA mandatory?

Yes, registration of the LPA with the Office of the Public Guardian (OPG) is mandatory to ensure its effectiveness and enforceability.

What is the process of registering an LPA in Singapore?

The process involves submitting the completed LPA form and supporting documents to the OPG along with the applicable registration fee.

How long does it take to register an LPA?

The registration process typically takes around six to eight weeks after the submission of the LPA form to the OPG.

Can I use an LPA that was created overseas in Singapore?

Foreign LPAs are generally not recognized in Singapore. Therefore, it is advisable to create a separate LPA specifically for use in Singapore.

Can the donee(s) make decisions against my wishes?

The donee(s) must act in your best interests and make decisions according to your known preferences, as long as they are within the legal framework provided by the LPA.

Can I create an LPA for someone else?

No, you cannot create an LPA on behalf of someone else. Each individual must create their own LPA.

Can I create an LPA if I have already lost mental capacity?

No, you must have mental capacity at the time of creating an LPA. If you have already lost mental capacity, alternative legal mechanisms may need to be explored.

What happens if I don’t create an LPA and subsequently lose mental capacity?

Without an LPA, there may be difficulties in managing your affairs. In such cases, an interested party can apply to the court for the appointment of a deputy to manage your affairs.

Can the donee(s) be held legally accountable for their decisions?

Yes, the donee(s) can be held legally accountable for their decisions and actions. They are expected to act in accordance with their fiduciary duties and the principles of the LPA.

Can I appoint a professional as my donee?

Yes, it is possible to appoint a professional, such as a lawyer or accountant, as your donee, as long as they meet the eligibility criteria.

Can I create separate LPAs for personal welfare matters and financial matters?

Yes, you have the option to create separate LPAs for personal welfare matters and financial matters, depending on your specific requirements.

What happens to my LPA if I move to another country?

If you move to another country, the recognition and applicability of your Singapore LPA will depend on the laws and regulations of the new jurisdiction. It is advisable to seek legal advice in the new country to understand the requirements and consider creating a new LPA if necessary.

Analysis of a Case involving Lasting Power of Attorney: Zheng Hongfan v Singaravelu Murugan [2019] SGHC 184

In this case, the plaintiff, who is the finance director of Xingang Investment Pte Ltd, sought a mandatory injunction against the defendant. The plaintiff had loaned S$350,000 to Emson Systems (S) Pte Ltd, owned by the defendant’s wife. Both the defendant and his wife had executed a Deed of Guarantee, and the defendant had also executed a Power of Attorney in favor of the plaintiff.

The plaintiff, as the donee of the Power of Attorney, sought to enforce the guarantee and exercise the powers granted to them, including selling the defendant’s property to recover the loaned sum. The defendant raised three main arguments against the plaintiff’s application.

First, the defendant argued that the Power of Attorney did not grant the plaintiff the power to access the property. However, the court found that the Power of Attorney empowered the plaintiff to appoint agents, including valuers, to act on the defendant’s behalf in matters related to the sale of the property.

Second, the defendant suggested that the Power of Attorney should be read together with the Loan Agreement and that the plaintiff was not entitled to carry out a valuation exercise. The court refuted this argument, stating that the plaintiff had the power to sell the property to a third party at market price, as provided by clause 7.5(ii) of the Loan Agreement.

Lastly, the defendant claimed that the Power of Attorney was too vague and wide because it did not specify what would happen to the remaining sale proceeds. However, the court determined that clause 7.5(ii) of the Loan Agreement clearly stated that the sale proceeds would be used to repay the outstanding loan and other amounts due to the lender.

Consequently, the court granted an order in favor of the plaintiff, including access to the property for valuation, and ordered the defendant to pay costs to the plaintiff amounting to $15,000.

Glossary of relevant terms:

Lasting Power of Attorney (LPA): A legal instrument that allows individuals (donors) to appoint donees to make decisions on their behalf in the event of mental incapacity.

Donor: The individual who creates the Lasting Power of Attorney and appoints one or more donees to act on their behalf.

Donee: The person or persons appointed by the donor to make decisions on their behalf under the Lasting Power of Attorney.

Mental Capacity: The ability of an individual to make decisions and understand the implications of those decisions. It is a prerequisite for creating and executing a Lasting Power of Attorney.

Personal Welfare Matters: Decisions related to an individual’s personal care, medical treatment, living arrangements, and general well-being.

Financial Matters: Decisions pertaining to an individual’s property, finances, investments, and financial transactions.

Enduring Power of Attorney (EPA): A previous legal instrument in Singapore that allowed individuals to appoint donees to make financial decisions on their behalf. EPAs executed before 1 March 2010 are still valid.

Mental Incapacity: A state in which an individual lacks the ability to make decisions due to an impairment or loss of mental capacity.

Certificate Issuer: A qualified professional, such as a lawyer or psychiatrist, who certifies the donor’s understanding and execution of the Lasting Power of Attorney document.

Office of the Public Guardian (OPG): The governmental agency in Singapore responsible for the registration and supervision of Lasting Power of Attorney.

Revocation: The act of canceling or terminating a Lasting Power of Attorney. It can be done by the donor as long as they have mental capacity.

Registration: The process of officially submitting the Lasting Power of Attorney to the Office of the Public Guardian for recording and recognition.

Mental Capacity Assessment: An evaluation conducted by a qualified professional to determine an individual’s mental capacity to make decisions.

Court of Protection: The judicial body in Singapore that handles matters relating to the Lasting Power of Attorney, including applications for revocation, suspension, or replacement of donees.

Advance Medical Directive (AMD): A separate legal document in Singapore that allows individuals to specify their preferences regarding medical treatment in the event of incapacitation.

Fiduciary Duty: The legal duty of the donee to act in the best interests of the donor and make decisions in accordance with the donor’s known preferences.

Third Party Reliance: The ability of third parties, such as banks or healthcare providers, to rely on the validity and authority of the Lasting Power of Attorney when interacting with the donee(s).

Suspension: A court order that temporarily restricts the powers of the donee(s) or puts the Lasting Power of Attorney on hold, typically in cases where concerns or disputes arise.

Replacement of Donee(s): A court order that removes the current donee(s) and appoints a new person or persons to act in their place.

Public Guardian: The head of the Office of the Public Guardian oversees the registration and supervision of Lasting Power of Attorney.

The Lasting Power of Attorney (LPA) is a crucial legal instrument in Singapore, empowering individuals to plan and make decisions for their future, even in cases of mental incapacity. At IRB Law, our experienced lawyers specialize in comprehensive LPA services. We understand the legal requirements and complexities involved in drafting a valid LPA. Whether you need assistance in creating an LPA, understanding granted powers, or seeking advice on capacity and decision-making, our dedicated professionals are here to help.

Author: Mohamed Baiross/IRB LAW LLP