Introduction
In this month’s family legacy planning article, we will look at the importance of the Lasting Power of Attorney (LPA).

The LPA is a legal document which allows a person (“donor”) who is at least 21 years old to appoint his/her trusted persons (“donee”) to manage his/her affairs in the event of losing mental capacity and the donee can be appointed to act in two areas of personal welfare matters, and property and affairs matters.

Benefits Of An LPA
An LPA:
1. Enables the donor to choose the trusted donee to act in the donor’s best interests.
2. Enables the donor to give personal welfare powers to the donee e.g. bringing the donor to the hospital and doctor, signing consent form for surgery and
medical treatment and etc.
3. Enables the donor to give property and affairs powers to the donee e.g. access to donor’s bank account, selling/renting the donor’s property and etc.
4. Will alleviate the stress and difficulties faced by the donor’s loved ones when there is no LPA in place. In the absence of an LPA, the donor’s loved ones would need to apply for a deputyship court order which is time-consuming and expensive.

How To Make And Apply For The LPA
By way of background, LPA is a government initiative started sometime in 2010 and all LPA will be collected and registered by the Office of the Public Guardian (OPG) which is part of the Ministry of Social and Family Development and they are located at 20 Lengkok Bahru #04-02 Family @Enabling Singapore 159053.

To submit the LPA, the donor and the donee need to sign on the LPA and send the signed LPA to the OPG together with clear photocopies of the donor’s and donee’s NRICs or passports (if they are foreigners).

The OPG will then verify the documents and accept the complete application for registration if there are no valid objections raised within the 3 weeks mandatory waiting period. If for whatever reason the donor or the donee raises an objection during the 3 weeks waiting period, then the LPA will not be processed by the OPG pending clarification from the donor/donee on their objection.
Please also note that the LPA needs to be submitted to the OPG within 6 months from the date the donor signs on the LPA. Further, from 1 August 2019, the registered LPAs are all in soft-copies mode where the donor and the donee are
able to access the LPA by logging in using their SINGPASS at the OPG’s e-services portal and they are also able to share the LPA with anyone e.g. lawyers, HDB, CPF Board, hospitals and etc. For foreigners, they are able to get certified true copies of the LPA from the OPG for their safe-keeping.

Types Of LPA
There are 2 types of LPA (Form 1 and Form 2):
– LPA Form 1 – Standard version that the donor can use to give general powers to his/her donee.
– LPA Form 2 – Customised version for donor who wishes to grant his/her donee customised powers.

Their differences are further tabulated as follows:
1. Application fee:
LPA Form 1: Free for Singapore citizens until 31 March 2023. Payable for Singapore Permanent Residents and Foreigners.
LPA Form 2: Payable for Singapore citizens, Singapore Permanent Residents and Foreigners

2. Number of donees:
LPA Form 1: Minimum 1, maximum 3.
LPA Form 2: Unlimited.

3. Who can witness the LPA (Certificate Issuer):
LPA Form 1: Lawyers and only selected doctors and psychiatrists.
LPA Form 2: Only lawyers.

4. Powers:
LPA Form 1: Able to choose only on what is provided in the form e.g. consent to clinical trial, sell the donor’s residence and making cash gifts.
LPA Form 2: Able to customize in accordance to the donor’s needs.

5. Property:
LPA Form 1: Able to impose a restriction on dealing with 1 residential property.
LPA Form 2: Able to customize in accordance to the donor’s needs.

6. Statistic of people doing LPA:
LPA Form 1: More than 90%.
LPA Form 2: The remaining 10%.

7. Number of LPA registered:
LPA Form 1 and 2: Expected to be more than 40,000 by the end of 2021.

* The LPA can only be used when the donor loses mental capacity and has been certified to be incapable of managing his own affairs. Should the donor regains his/her mental capacity again, then the donee should step aside to allow the donor to manage his/her own affairs again. The LPA remains valid.

Which LPA Form Is Better?
Given the more specific and customized powers the donor can give to the donee under LPA Form 2, this has to be drafted by a practicing lawyer on the donor’s behalf. While LPA Form 2 is not as common as LPA Form 1, it can prevent disputes between family members as could be seen in the case of VHI v VHJ [2020] SGFC 27. In this case, the father had appointed his 2 daughters to be the donees in his LPA Form 1 and he had appointed them to act jointly and severally i.e. either one of the daughters can act without getting the consent from the other. But disputes started to arise between the 2 sisters after the father lost mental capacity especially in relation to the father’s business affairs where the 2 of them cannot seem to get along on the running of their father’s business. The sisters split their responsibilities in caring for their father, with the younger sister taking care of the father’s medical care and personal needs and with the elder sister taking care of the father’s finances and business affairs.

Some months had passed under this arrangement until the younger sister realized that the elder sister was not properly accounting for the income of the business and quite a substantial sum of monies were unaccounted for and the elder sister did not provide a satisfactory response when asked.

The younger sister then later found out that before the father lost mental capacity, the elder sister had taken their father to sign legal documents to transfer the ownership of the business to the elder sister and she was surprised because she knew that given the state of her father, the father should not have any mental capacity and would not understand any legal documents at the material time.

The younger sister thus made a court application to revoke her elder sister’s power under their father’s LPA and also sought an order for an investigation by the OPG for the elder sister’s conduct. The court then stepped in to make the modifications to the powers granted under the LPA.

On hindsight, had the father known that his 2 daughters would end up this way, he should have opted or chosen for the LPA Form 2 whereby he can fully customize on the powers i.e. what exact powers to be given to one daughter and what exact powers to be given to the other daughter.

Conclusion
A very important point to note on doing up an LPA is that one can never be too young to start doing their LPA as one can lose mental capacity when one is still young and it is therefore necessary to have the LPA in place to protect yourself be it young or old male or female. As also can be seen from the case study, the LPA Form 1 can pose challenges for some people whose businesses and investments require timely decision-making and the right individuals to deal with it and for these categories of people, the LPA Form 2 would be more suited for them where they could have multiple assets or those sophisticated individuals who have particular investment habits, preferences or risk taking appetites. By executing an LPA Form 2 with specific provisions and specific powers given to the specific donees, one can be rest-assured that the right person is appointed and it can well avoid lengthy disputes before the court.

If you wish to do up your LPA be it Form 1 or Form 2, we at Sim Mong Teck & Partners are well-placed to assist you given the number of years of experience we have on this area. Please feel free to contact us and we are more than happy to assist you. Thank you.