The benefits of drawing up a will are widely recognised. It gives the maker of the will the opportunity to set his estate affairs in order by selecting as executors, the individuals best suited for the role and, by giving them the necessary instructions on how to administer the estate upon his death.
Now there are also opportunities available for a person to make advance provisions for the possibility of losing their mental capacity during their lifetime, and becoming incapable of managing his own financial and welfare affairs as a result.
This can be done through making a Lasting Power of Attorney (LPA), which allows a person (person A) to nominate another person (person B), whom he considers reliable and capable, to make decisions for A in the event A ever loses his mental capacity. This becomes increasingly important as the risk of supervening mental incapacity grows through longevity, illness or accident.
This article will explain what is an LPA and the reasons for making an LPA in Singapore while you still can.
What is an LPA?
The LPA is a legal document that allows a person to appoint one or more persons, whom he trusts, to make key decisions and act on his behalf should he lose the mental capacity to do so.
The person making the LPA is referred to as a donor while the appointed person is referred to as a donee. Through an LPA, the donee can be empowered to take care of the personal welfare and/or also financial matters of the donor.
An LPA must be:
- Made by someone aged 21 or above, who is not an undischarged bankrupt, and has mental capacity to understand what he/she is doing;
- Prepared using prescribed forms i.e. Form 1 or Form 2 (more below); and
- Registered with the Office of the Public Guardian (OPG) before mental capacity is lost.
When applying for the LPA, the donor may choose to give the donee general powers such as:
- The power to act for the donor in personal welfare matters such as decisions on care, where to live etc; and/or
- The power to act for the donor in property and affairs, which includes dealings with banks, CPF matters or the sale of property.
This can be done by completing Form 1.
The donor may also choose to give the donee specific powers as personalised in the LPA. However, he would need to fill in Form 2 instead of Form 1. Form 2 needs to be drafted by a lawyer as it may concern unique/complex arrangements.
All LPA applications would need to be certified by a certificate issuer, who can either be a practising lawyer, a psychiatrist, or an accredited medical practitioner.
The certificate issuer would certify that the donor understood the purpose and consequences of the LPA and there was no fraud or undue pressure used to induce the donor to create the LPA.
For more information, please refer to our article on what is an LPA and how to make one in Singapore.
The following are some reasons for deciding to make an LPA:
1. To Protect the Donor’s Interests During his Lifetime
Making an LPA enables a person to plan ahead and make choices for his future before he loses his mental capacity. In this regard, it is important to realise that an LPA is not just for the elderly. Younger people may also become incapacitated through accident or illness.
There are examples of young and healthy people being struck down by an illness, or involved in a car accident, and reduced to a vegetative state. When this happens, the young person (X) would not be in a position to manage his/her personal or financial affairs.
In such cases, any will that X has prepared would not apply because the provisions of a will only operate when the individual has passed on. However, if X had made an LPA before he lost his mental capacity, his interests would have been protected when he became vulnerable.
A healthy person might think there is no need for an LPA and that a will would suffice. But the truth of the matter is that one does not know if or when he/she may unfortunately lose mental capacity. Life is unpredictable, and it pays to be always prepared.
2. To Protect the Donor’s Family from Strenuous Court Processes
If a person were to lose his mental capacity suddenly, his family members would not automatically be given the right to make decisions on the incapacitated person’s behalf or have access to his money.
Without an LPA, the family members would need to apply to court for an order to administer the affairs of a person who lacks mental capacity. This court order is one where the court appoints a person to be the court-appointed deputy to manage the affairs of the person who lacks mental capacity.
An LPA avoids the hassle of getting a court order, which can be both time-consuming and expensive. It could create stress and inconvenience for loved ones who would have to pay for the person’s care and maintenance as well as expenses relating to applying for the court order.
Additionally, there could be potential disputes among family members about who should be appointed as the deputy of the person who had lost his mental capacity.
Some of these disputes can only be settled by the court, which may cause family members further inconvenience.
3. To be able to Appoint a Donee of the Donor’s Choice
If the donor makes an LPA, he would be able to appoint someone of his choice, who can automatically step forward to act on his behalf, if a doctor certifies the donor to have lost his mental capacity.
If a person (A) does not make an LPA and subsequently loses his mental capacity to make certain decisions, someone (B) who might not be A’s choice could apply to court:
- To be given the authority to make decisions for A as A’s deputy; or
- To appoint one or more persons to be A’s deputies to make decisions for A
When this occurs, there may be a possibility that the person(s) making decisions on behalf of A are not aware of A’s interests, preferences and beliefs and therefore, may not act in the best interests of A.
4. The Donee will be able to Start Caring for the Donor Quicker
If there was an LPA in place when the donor is certified as lacking mental capacity, the donee could immediately start managing the donor’s personal welfare and/or property and affairs, instead of waiting for the entire court process of appointing a deputy before any action can be taken.
For example, if the donee is authorised to make decisions on the property and affairs of the donor, the LPA would allow quicker access to the donor’s bank accounts and insurance payouts to ensure payment of the donor’s medical care and maintenance.
If the donee is authorised to only make decisions about the donor’s personal welfare then he/she cannot make decisions about the donor’s finances. In this case, he/she may need to apply to court to be allowed to make decisions on finance matters either by himself or jointly with other donees (if any).
5. Donors have the Option of Appointing Professional Donees
Changes to the Mental Capacity Act have enabled donors to appoint professional donees. This would mean that donors who were single, divorced or had no next-of-kin or close friends can now appoint professional donees when previously they might not have had anyone to approach/rely on to be their donee.
At present, only those from selected professions, such as lawyers, accountants, healthcare and social service professionals, who meet certain criteria and pass a certification course, can apply to be registered as professional deputies or donees.
These professions were chosen by the OPG because they have the necessary skills and experience to competently handle decisions on behalf of the mentally incapacitated.
Persons who still have kin may also appoint a professional donee if they so wish. They may choose this option if they have complex instructions about their care and assets, which may be better understood by professionals, or if they want to prevent heated disagreements among their loved ones (as mentioned above).
6. Registering for an LPA is a Convenient and Affordable Option
The LPA is cost-efficient as opposed to the hassle and expenses placed on family members when applying to the court to appoint a deputy after their loved one has lost mental capacity (as discussed above).
Application fee for Form 1 has been waived until 31 August 2020
In particular, the $75 application fee for registration using Form 1 has been waived by the OPG for Singapore citizens until 31 August 2020. This means that registration for all Form 1 LPA applications made before 31 August 2020 are free of charge.
The only fee for Form 1 is the fee charged for an LPA certificate assessment which costs around $50.
The application fee for an LPA registration using Form 2 remains and costs $200. The LPA certificate assessment fee would also apply to LPA registrations made using Form 2.
Online LPA system is also being developed
At present, the LPA can only be made in hard copy, which requires manual processing and affects efficiency.
However, the OPG is undertaking a study to develop a system that allows individuals to submit LPA applications online to reduce processing time from the current average waiting time of 60 working days.
At the end of the day, the decision as to whether to make an LPA is a personal decision.
Nevertheless, it would be the most prudent decision to make to safeguard one’s interests and those of one’s family if there was a likely possibility that a person could become mentally incapacitated.
Please feel free to contact me should you require a lawyer to draft and/or certify your LPA application.