Draw up an LPA before it's too late

This post came out from The Straits Times (30 October 2016)

What is an LPA? This allows people to voluntarily appoint one or more persons (donees) to take decisions and act on their behalf as a proxy decision-maker if they lose mental capacity one day.

The LPA allows donees to act in two broad areas - personal welfare and property. Naturally, it is unwise to wait until one is showing signs of physical or mental vulnerability before executing an LPA. Knowing that provision has been made for the future provides peace of mind, as no one can predict when illness or deterioration will take place.

Mr Alex Goh, an associate with JLC Advisors, says we are in a better position to know who can be trusted to be our donees. "Without an LPA, there will be uncertainty as to who can act as your proxy decision-maker. An application would have to be made to court to decide who should be appointed as your deputy to decide and act on your behalf. In some cases, there may be friction between family members as to who should be appointed as deputy," he said.

Ms Ang Kim Lan, director at Goodwins Law Corporation, points out the differences between a will and an LPA. "The provisions of a will kick in only when one passes on. However, if a person suffers a lack of mental capacity (for example, lapsing into a coma or suffering a stroke, brain injury, dementia and mental health issues), the will does not apply. "Most of my clients thought that the will kicks in when such circumstances occur and were surprised when told otherwise," she said.

Mr Vincent Lim, a partner at JLC Advisors, notes that one advantage of the LPA is that the donee would get quick access to funds. "If an LPA is in place, this will allow your donee to get quick access to funds necessary for your care and maintenance. Banks will allow your donee to take charge of your bank accounts upon presentation of documents such as the original LPA and a doctor's report certifying that you have lost the capacity to manage your own affairs," he said.

If you lose your mental capacity without an LPA, funds in your bank account cannot be touched until a court order is obtained appointing a person as deputy. It could create stress and inconvenience for loved ones who would, in the interim, have to pay for your care and maintenance as well as expenses relating to applying for the court order, Mr Lim added. Ms Ang advised that an LPA should be taken out as part of a person's estate planning. She points out that it is not true that an LPA is a legacy planning tool for the very old or the very rich. "In fact, it should go hand in hand with making a will. It is prudent to align both legacy planning tools so that there is continuity in the person's wishes, regardless of his or her mental capacity, and at death," she added.

Mr Brandon Lam, head of financial planning group at DBS Bank Singapore, said that as the population ages, the number of people with mental illness is expected to go up. "Having an LPA in place will help to protect the interest of the individuals in case they lose their mental capacity," he said.

According to studies, after age 65, the risk of Alzheimer's doubles every five years. After the age of 85, the risk reaches nearly 50 per cent. "That, to me, means that I'm very likely to get mentally incapacitated when I get older," said Mr Keon Chee, director of Legasy Planners.

What are the top considerations?

CHOICE OF DONEE

It is critical to choose the right person to be your donee because of the significant powers wielded by him or her. After all, the donee is someone conferred with the authority under the LPA to make decisions about your personal welfare and/or property and affairs when you no longer have the capacity to do so. He or she should be someone who is trusted and competent and has good financial standing. You can appoint more than one donee. If joint donees are appointed, they should be able and willing to work together to make decisions in your best interests, said Mr Goh.

SCOPE OF POWERS

In the LPA, you may decide to give the donee general powers for all your personal welfare and/or property and affairs, or only specific powers. There are two LPA versions available. LPA Form 1 - which can be self-completed - allows you to grant general powers subject to basic conditions or restrictions. Mr Chee said LPA Form 1 is like a "check the box" form for standard cases where the donee has almost full power over the donor's personal welfare and property affairs.

"This works for the majority of people. When a person becomes mentally incapacitated, the donee then steps into the donor's shoes and goes about acting for the benefit of the donor. However, Form 1 doesn't say 'please look after my mum and dad or even my cat'. Form 2 allows such care to be specified and/or performed through the trust," said Mr Chee. LPA Form 2 needs to be drafted by a lawyer and allows you to tailor specific powers that are to be granted to the donee. In both forms, you will find the terms "personal welfare" and "property and affairs". A personal welfare donee is authorised to decide on matters such as where you are to live, whom you may have contact with, what social activities you take part in and what you wear and eat. A property and affairs donee will have control and management of your property. Among other things, he or she can deal with your property, handle your tax matters and invest your savings. Those who have assets of a larger and more complicated value may prefer to tailor the powers to be granted to their donees in respect of their property and affairs.

APPOINTING PROFESSIONAL DONEES

Earlier this year, changes to the Mental Capacity Act enabled professionals such as lawyers or social workers to step in and be appointed as professional donees. This is significant as people who are single, divorced or elderly and have no next-of-kin or close friends - and thus no one to rely on to be their proxy decision-makers - can consider appointing professional donees. Even those with family members now have the option of paying professionals to be donees. They may prefer this if they have complex instructions about their care and assets, or if they want to prevent heated disagreements among their loved ones.

AN LPA DOES NOT OVERRIDE AN ADVANCE MEDICAL DIRECTIVE (AMD)

You should be aware that your LPA does not override an AMD if you have registered one. An AMD is a legal document in which you register in advance your wishes not to have any extraordinary life-sustaining treatment to prolong life when you are suffering from a terminal illness, requiring extraordinary life-sustaining treatment, and are unconscious or incapable of exercising rational judgment over your own treatment. The Ministry of Health has stated that making an AMD is a voluntary decision, and cannot be made on behalf of another person. And regardless of objections from family members, doctors will have to respect a person's AMD.

FEE FOR LPA APPLICATIONS

From Sept 1 this year, the application fee for LPA Form 1 for Singaporeans was revised to $75. The good news is that this fee is waived for another two years, until the end of August 2018. The fee waiver for LPA Form 1 applications was introduced in 2014. This means we will be able to file LPA Form 1 applications for free until this date, although people will still have to pay fees charged by professionals engaged to witness and certify the application, such as medical practitioners and lawyers. The fee of $200 for LPA Form 2 for Singaporeans remains unchanged.

To download the LPA forms and get more information, visit www.publicguardian.gov.sg

Thoughts anyone?

Yours,

Something Small Thinking Big

Slow take-up for Lasting Power of Attorney Scheme

This post came out from The Straits Times (4 December 2016)

Since the Lasting Power of Attorney (LPA) scheme started in 2010, only 1 per cent of the adult resident population in Singapore, or about 35,000 people, have applied for an LPA. Retiree Ong Teck Wan, who was keen on getting an LPA done, said in a letter to The Straits Times Forum that he was put off from doing so after his family doctor told him it would cost $120. "I feel it's important to do it, but I also feel it's very pricey," Mr Ong, 65, said.

The Sunday Times understands that, on average, certificate issuers charge between $120 and $150 for their services. However, there are hundreds of options available and prices tend to vary widely. The Office of the Public Guardian said it does not have rules on how much certificate issuers should charge. A spokesman for the office said: "The identified certificate issuers can charge a professional fee for this service, as the role involves various responsibilities and fees may differ between certificate issuers, depending on complexity of the case for assessment." Psychiatrists, practising lawyers and accredited doctors can all serve as LPA certificate issuers.

There are two versions of the LPA.

LPA Form 1 can be used for standard cases where the appointed person has almost full power over the donor's personal welfare and property affairs. LPA Form 2 needs to be drafted by a lawyer and allows applicants to create specific powers to be granted to the appointed person.

Mr Goh Kok Yeow, a partner at law firm De Souza Lim & Goh, said if a client requests that two appointed persons act jointly on his behalf, he must make sure the client understands the implications. "If one of them dies or becomes a bankrupt, for instance, the document becomes invalid," he said. Mr Goh typically charges clients a few hundred dollars, depending on factors such as whether the person requires his help to fill in the form, and how long the consultation takes."I can spend two hours with a client explaining these things," he said.

At LifePoint, a centre set up by voluntary welfare organisation Sheng Hong Welfare Services, monthly talks are organised to help seniors better understand the scheme. The centre works with lawyers to offer subsidised services, meaning the elderly can get their LPA forms signed and certified for $60. Sheng Hong manager Liau Yi Fang said: "A lot of elderly folk do not know how to read English - the language used for such official documents - so they come to us and we explain it to them."

Thoughts anyone?

Yours,

Something Small Thinking Big

Surge in people appointing guardians to act for them

This post came out from The Straits Times (29 January 2016)

There was a big jump last year in the number of people appointing guardians to make decisions on their behalf should they lose their mental faculties, after the process was made cheaper and easier.

In all, about 8,360 applications for the Lasting Power of Attorney (LPA) was accepted, an increase of almost 160 per cent over the previous year. About seven out of 10 applications were made by people aged 56 and older.

The LPA is a legal document that lets a person appoint an individual to make key decisions for him when he becomes unable to do so. Anyone who is at least 21 years old can draw up or be named in the LPA.

The changes that made the process easier and more convenient were introduced in late 2014. The basic form used by most applicants was simplified, with less legal and technical jargon, and reduced from 15 pages to eight. The $50 application fee for the form was also waived for citizens.

There is another form for those with larger, more complicated assets and who wish to grant specific authorisation to their appointees. Its $200 fee is not waived. The fee waiver, which started in September 2014, will end on Aug 31 this year. A spokesman for the Ministry of Social and Family Development said it is studying the possibility of extending the waiver.

Thoughts:

1. I have yet to sign up for LPA, but it do seem that it is important that someone can help me make decision when I am not able to do so. Is there more information at the nearby CC or can they make the sign up/ talks in my office so that I can find out more? 

Thoughts anyone?

Yours,

Something Small Thinking Big