Last year, we examined the District Judge’s decision in XKG v XKF, considering what it revealed about the assessment of mental capacity in the execution of a Lasting Power of Attorney (“LPA”). The matter has since progressed on appeal, and the General Division of the High Court has now delivered its judgment in XKG v XKF [2025] SGHCF 66.
In this month’s Family Legacy Planning feature, we return to the case to reflect on the High Court’s reasoning and the broader principles it clarifies — particularly the legal and practical demands that underpin the valid execution of an LPA.
The Background to the Appeal
P executed an LPA on 24 August 2023 appointing her brother as her donee and nephew as the replacement donee. Her son challenged the validity of the LPA, arguing that P lacked mental capacity at the material time.
By the time proceedings were heard before the District Judge (“DJ”), P had already lost mental capacity. The central question before the court was therefore retrospective: whether P had possessed the requisite mental capacity at the time she executed the LPA.
The evidence showed that P had been diagnosed with dementia several years earlier, and that by mid-2023 her condition had worsened. Medical assessments conducted around the time of execution — including MMSE testing — indicated moderate cognitive impairment. The DJ found that P exhibited significant memory deficits, was poorly oriented to time and place, and demonstrated limited awareness of her own financial circumstances.
Of particular concern was P’s inability to recall or meaningfully describe aspects of her property ownership and financial affairs. The DJ concluded that these deficiencies were not merely superficial gaps in knowledge, but symptomatic of impaired cognitive functioning affecting her ability to understand and process the implications of the LPA. The DJ therefore held that P lacked the functional capacity required under the Mental Capacity Act at the material time, and declared the LPA invalid.
The brother appealed the decision. His counsel argued that the DJ had placed undue weight on P’s inability to recall details of her assets; contended that the legal threshold for executing an LPA did not require comprehensive knowledge of one’s estate; and that it was sufficient for P to have expressed a clear wish to appoint her brother as her donee. In essence, the appeal invited the High Court to consider whether the District Judge had set the bar for LPA capacity too high.
The High Court’s Decision
The High Court began by reaffirming the statutory presumption of capacity under the Mental Capacity Act (“MCA”) – that Capacity is the default position. As the Court noted at [33], a person “must be assumed to have capacity unless it is established that the person lacks capacity.” The burden therefore lay on the party challenging the LPA to prove, on a balance of probabilities, that P lacked capacity at the material time.
The Court then clarified the structure of the legal test. Mental Capacity under s 4(1) of the MCA contains both a clinical and a functional component. The presence of a mental impairment alone does not automatically negate capacity. Rather, the impairment must result in a functional inability to make the specific decision in question. In this case, although it was undisputed that P suffered from dementia, the central inquiry was whether that condition rendered her unable to understand, retain, use or weigh the information relevant to executing the LPA.
The Court undertook a detailed review of the medical evidence, including the MMSE assessments conducted close to the date of execution. It found that P’s cognitive deficits were not minor lapses in recall but reflected broader impairments in orientation, attention and working memory. These deficits affected her ability to retain information long enough to meaningfully process it.
What proved decisive was not the mere diagnosis of dementia, nor the fact that P could not enumerate every asset she owned. The critical issue was whether she could engage in the decision-making process required for the valid execution of an LPA. On the evidence, the Court concluded that her memory impairment materially compromised her ability to retain and weigh relevant information at the time she signed the instrument.
The appeal was therefore dismissed, and the District Judge’s finding that the LPA was invalid was upheld.
The Substance Behind the Signature
One of the most instructive aspects of the High Court’s judgment is its recognition that the execution of an LPA is not merely an act of trust. It is not enough for a donor to feel confident in a family member. An LPA is the formal delegation of legal authority — authority that may later govern the donor’s medical care, living arrangements and financial affairs.
The Court anchored its analysis firmly in the statutory framework. Under s 5(1) of the Mental Capacity Act, a donor must be able to understand, retain, use or weigh the information relevant to the decision, and communicate that decision. As reiterated at [38], a deficiency in any one of these functional abilities would result in a lack of capacity. The emphasis, therefore, is not on sentiment or intention alone, but on whether the donor can cognitively engage with the decision in a meaningful way.
On this note, the Court then went on to scrutinize the decision of what was being conferred in the LPA. At [76], the Court referred to the donor’s ability (or the lack thereof) to understand “the consequences of executing the LPA, including that the Appellant may make legally binding decisions relating to her personal welfare and/or property and affairs.” This focus on consequences is significant. One cannot meaningfully understand the implications of an LPA without appreciating the structured choices that give those implications shape.
Viewed in this light, the choices embedded within the LPA framework are neither technical nor trivial. The donor must determine which categories of powers are to be granted. The donor must assess whether the proposed donee is suitable to exercise those powers. Where more than one donee is appointed, the donor must appreciate the difference between joint and joint-and-several arrangements and the practical implications of each. The donor must also consider whether limitations are appropriate and whether replacement donees should be named.
The High Court’s reasoning makes clear that if a donor is unable to comprehend these structured choices or the legal consequences that flow from them, the validity of the instrument may properly be called into question. The signature on an LPA is not ceremonial. It represents the conclusion of a deliberative process — and that process must be underpinned by functional capacity.
Requisite Mental Capacity
XKG v XKF reinforces that capacity must be assessed with precision and specificity. The relevant question is not whether the donor has dementia. It is whether the donor’s mental functioning, at the material time, was compromised to the extent that she could not undertake the particular decision required.
As the Court made clear at [54], the existence of a neurodegenerative disease does not automatically equate to incapacity. The focus remains functional. The donor must be able to understand the nature and purpose of the LPA — that it operates prospectively upon future loss of capacity. The donor must appreciate that the instrument confers legally binding authority on another. He/She must be able to grasp the scope of powers being granted and the reasonably foreseeable consequences of doing so.
The Court did not hold that imperfect knowledge of one’s financial affairs automatically establishes incapacity. Limited awareness may reflect personality, delegation habits or lack of financial literacy. However, where cognitive impairment is of sufficient severity, knowledge deficiencies may assume a different character. In this case, the Court found in [63], that P’s memory impairment affected her ability to “retain information long enough to use or weigh the information” relevant to the LPA decision.
The assessment of capacity is therefore intensely fact-sensitive. It requires the court to consider not only diagnosis, but the donor’s actual cognitive functioning in relation to the specific legal act being undertaken. The inquiry is contextual, structured and decision-specific.
Asymmetry of Information
The Court also considered the informational context in which the LPA was executed. P had discussed the LPA only with her brother. Her son was not involved in the process.
The High Court did not suggest that exclusion of a family member is unlawful or automatically suspicious. However, it recognised that such circumstances may contribute to what has been described as an “asymmetry of information” affecting the quality of the donor’s decision-making process.
The High Court did not suggest that exclusion of a family member is unlawful or automatically suspicious. However, it recognised that such circumstances may contribute to what has been described as an “asymmetry of information” affecting the quality of the donor’s decision-making process.
While there is no statutory requirement to involve all family members, the exclusion of relevant parties may, in certain factual contexts, deprive a vulnerable donor of information and diverse perspectives that could assist in making an informed decision.
Capacity assessments are highly fact-sensitive. The court will consider not only the donor’s cognitive abilities, but also the informational environment in which the decision was made.
Concluding Reflections
XKG v XKF reinforces several important principles.
First, dementia alone does not negate capacity. The law presumes capacity, and impairment must translate into functional inability.
Second, executing an LPA requires meaningful deliberation. The donor must be able to understand, retain, weigh information and communicate decisions about the nature and consequences of the instrument.
Third, the surrounding circumstances — including who was involved and how information was conveyed — may become relevant in close cases.
For families, this case underscores the importance of executing LPAs early, before cognitive decline creates evidential uncertainty.
For practitioners, it highlights the need for careful explanation, thorough documentation and structured guidance through the decision-making process.
How Can SMTP Assist you
At SMTP, we approach LPAs with discipline and structure, guiding clients carefully through the legal choices embedded within the instrument and ensuring that the scope and consequences of the authority conferred are fully understood. An LPA should never be treated as a procedural formality, but as a considered legal act capable of withstanding future scrutiny.
Through our proprietary Wealth and Legacy Screening framework, we take the time to appreciate each client’s individual circumstances, cognitive context and family dynamics before any execution takes place. This deliberate process ensures that the instrument is thoughtfully structured, properly understood and aligned with the client’s intentions.
Our team stands ready to assist individuals and families who wish to approach their legacy planning with clarity and foresight. Should you or your clients require guidance on the execution or review of an LPA — or assistance in related trust or real estate matters — our Business Development Team would be pleased to arrange a consultation. We look forward to working with you.
