Introduction

Legacy planning transcends the mere transfer of tangible assets to one’s descendants; it delves into the intangible impressions and enduring associations woven into the fabric of one’s name. With regard to tangible assets, the necessary arrangements and steps should be taken by the individual to ensure that his/her affairs are well-managed and planned to ensure the smooth transfer of wealth to his/her beneficiaries with minimal unnecessary surprises or risks of potential disputes. Tools such as wills and trusts structures are commonly used to serve such purposes. Such meticulous planning of the distribution of one’s assets certainly plays a huge role in legacy planning as it not only ensures the smooth transfer of wealth but also contributes towards preserving one’s reputation and memory by minimizing ugly disputes that could bring disrepute to the individual and his/her beneficiaries. Beyond the abovementioned tools, there are other arrangements such as Advanced Care Planning (“ACP”) and the Lasting Powers of Attorney (“LPA”) that focus on the individual’s later years in life which are essential towards preserving the individual’s quality of life and thereby the memory that he/she leaves behind as well as setting the stage of a smooth transition when the day the individual passes on. In this month’s Family Legacy Planning article, we will be exploring these 2 arrangements: the ACP and LPA – understanding what they are and the issues they seek to address. With that, we shall then be able to consider how both the ACP and LPA can be used alongside the other legacy planning tools to deliver a more holistic approach at preserving and protecting one’s legacy.

Understanding Advance Care Planning in Singapore

In Singapore, ACP has gained increasing recognition and importance in recent years as the population ages and the need for comprehensive healthcare planning grows. ACP is a process that allows individuals to plan for their future healthcare needs, particularly in situations where they may lose the capacity to make decisions for themselves. It involves considering and documenting preferences for medical treatment, end-of-life care, and appointing a trusted individual (known as the Nominated Healthcare Spokesperson (“NHS”)) or two, to make healthcare decisions on their behalf if and when required.

The NHS will play the role of voicing out the individual’s views and preferences in the face of a medical crisis, where the latter no longer has the mental capacity to make decisions. Hence, it is crucial that the individual appoints someone who

(1) is willing and able to voice out the individual’s wishes; FAMILY LEGACY PLANNING NEWSLETTER
(2) understands the individual well, including his/her preferences, values and goals;
(3) is willing to respect the individual’s wishes in making decisions for him/her; and
(4) has the ability to make decisions under stressful circumstances. The NHS should also be at least of 21 years of age and can be anyone whom the individual trusts.

ACP not only gives the individual the opportunity to think ahead and prepare for the unexpected situation where one has lost the ability to make his/her own decisions, but beyond that, the communication of one’s preferences in advance will go a long way in reducing the stress and burden faced by family and friends during difficult situations, since they will be clearer about the individual’s preferences and do not have to rely solely on their own opinions when making decisions for the individual. This in turn, enables them to make the best decisions for the individual, on his/her behalf, while respecting his/her wishes.

It should be noted however, that the documents created under the ACP are not legally-binding, and the
directions given by the NHS does not necessarily need to be followed by the individual’s official representative. That being said, the ACP documents and directions of the NHS will be highly persuasive at determining if such representative had been acting in the individual’s best interest.

Lasting Power of Attorney

The LPA is a legal document which allows a person above the age of 21 years old (the “Donor”) to appoint another (the “Donee”) to act in his/her best interest and represent the Donor when the Donor loses mental capacity. The Donor may select to give his/her Donee(s) the powers to decide on matters concerning his/her personal welfare and/or property & affairs. This document is crucial as it gives the Donee(s) the legal right to represent the Donor and make key and important decisions for the Donor when the Donor is incapable of making such decisions which includes (but is not limited to): deciding what medical treatment the Donor shall receive, where the Donor shall reside, managing the finances of the Donor, making FAMILY LEGACY PLANNING NEWSLETTER insurance claims on behalf of the Donor, managing the assets of the Donor and even representing the Donor at meetings. Indeed, having a trusted individual manage your assets and life would to some ensure some level of status quo is maintained as compared to having the assets frozen and being unable to proceed with any further courses of action.

In the absence of an LPA, a volunteer can nevertheless apply to the courts for a Deputyship Order in order to make decisions for the individual who has lost mental capacity. However, this process is significantly more costly and the delay caused by the lengthy administration process may lead to considerable inconvenience and potential hardship for the individual who has lost his/her mental capacity and his/her dependants.

It should also be noted that the LPA could come in 2 forms: Form 1 and Form 2. Form 1 is a standard form that allows the Donor to give virtually all the necessary powers and discretion to the Donee for the Donee to act on the Donor’s behalf and best interest while Form 2
allows the Donor to specify exactly how the Donee should execute his duties and powers. The wide discretion given to the Donee in Form 1 may create friction between the Donee and others who may have differing views as to the best interest of the Donor. On the flipside, where Form 2 becomes overly prescriptive, the Donee may be restricted from taking the best course of action for the Donor where circumstances may have changed and flexibility is required.

ACP & LPA: A Holistic Solution

Both ACP and LPA are vital solutions designed to address the challenges that individuals face in their later years, and are crucial for maintaining their quality of life and ensuring their assets are properly managed at all times. By ensuring that their preferences are honored, individuals not only shape their legacy but also pave the way for a seamless transition of wealth when they eventually pass on.

However, as mentioned earlier in this article, each of these arrangements has its own limitations and it would be unwise to ignore such limitations. While ACP
offers thorough guidance towards the preference of the individual, it lacks legal enforceability, hence potentially limiting the NHS’s authority in representing the individual. Conversely, LPAs may be overly restrictive (in Form 2) or too vague (as in Form 1), leading to conflicts among the Donees or between the them and other parties.

Having considered both solutions, it seems that when both ACP and LPA are utilised together, their combined strengths can compensate for their respective flaws, resulting in a comprehensive solution that could be largely beneficial to the individual. By combining the LPA Form 1 with ACP, individuals can enjoy the advantages of both approaches- They have an official representative legally empowered to make decisions based on the individual’s best interests. Simultaneously, such Donees also gain clarity from the ACP regarding the individual’s wishes and preference, thus minimizing uncertainty and potential disagreements.

Concluding Thoughts

Legacy Planning extends beyond just the transfer of tangible assets to also include preserving one’s reputation and minimizing dispute, hence individuals should adopt a holistic approach when making the necessary arrangements. While solutions like wills and trusts serve their purposes for the distribution of assets, one should also integrate the ACP and LPA arrangements into estate planning strategies to enhance the protection of the individual’s interests and values, ensuring a legacy that reflects the individual’s wishes and priorities.

How Can SMTP Help You

Having an experienced hand guiding you through the intricacies of the law is always helpful regarding matters of legacy planning. Being specialists in the area of Estate Planning and tapping on our combined decades of experience and very own Wealth Legacy Screening process, our lawyers will be able to assist you in a very systematic and detailed manner on your Family Legacy Planning journey, ensuring certainty and clarity in the management and distribution of your estate.

We also believe in close engagement with our clients, paying close attention to their individual facts and circumstances, and tailoring our advice and courses of action to cater to their specific needs and requirements. SMTP’s core philosophy is to provide bespoke legal advice based on our private clients’ specific needs and requirements, as cases always differ on their fine details. Our team of dedicated staff are ever eager and prepared to assist interested parties. Should you or your clients require any assistance in trust or real estate matters, please feel free to contact our Business Development Team to schedule a consultation. We look forward to working with you.