Why you might consider making a Lasting Power of Attorney (LPA) when making your will

Yue-En Chong

7 years ago

Reading Time: 7 minutes

Three pillars to a strong and happy family

Unity. Harmony. Clarity. These are the three pillars of a strong and happy family. Even when the family faces a crisis, e.g. when a member loses his mental capacity or passes away, having a Lasting Power of Attorney (LPA) in addition to a Will ensures that the family continues being strong and united in such trying times.

Clarity – What a Lasting Power of Attorney offers

With a Lasting Power of Attorney executed, a couple would have the peace of mind that should one of them lose capacity, the healthy spouse would continue to have the power to buy, sell and rent property, open and close bank accounts on behalf of the incapacitated spouse. A Lasting Power of Attorney would also allow the healthy spouse to have access to the incapacitated spouse’s CPF monies which would handy in paying for the latter’s medical expenses. Having a Lasting Power of Attorney done would allow the healthy spouse to continue life with as little disruption as possible.

Not having a Lasting Power of Attorney can complicate a family’s life if one spouse is incapacitated

Conversely, not having a Lasting Power of Attorney done would mean that the healthy spouse would have to apply to the Family Justice Court to appoint him/her as the incapacitated spouse’s Deputy. The process of Deputyship is much more complicated as compared to executing a Lasting Power of Attorney. An LPA 1 form can be completed and executed within 30 mins and would cost a few hundred of dollars. However, the Deputyship process could take up to a year and would start from a few thousand dollars and could cost more if there are complications in the application.

Such clarity in the powers that the healthy spouse has is necessary to ensure that important and quick decisions can be made immediately without the life being placed on hold while waiting for the Court’s appointment of a Deputy.

Greater and more specific control to a healthy spouse

An LPA Form 2 (LPA 2) is more detailed and would give more specific powers to the healthy spouse or any other Donee (which is a person who is given a power of appointment).

An LPA 2 gives your donee customised powers and has to be drafted by a lawyer. Unlike an LPA 1 where your objective is to give your donee wide powers to act as fully as you can, an LPA 2 would take into consideration these following situations:

Your Personal Welfare Donee

Ensuring that your donee does not prevent someone from visiting you. For illustration: Evelyn is a healthy 60-year-old retiree. She wants to plan for her future by making an LPA which authorises her donee to decide on personal welfare matters. Evelyn wants to appoint her younger sister, Doris, as her donee. Her brother does not get along with her sister because of a financial dispute 20 years ago. Evelyn wants to make sure that her brother can visit her in the future if she lacks mental capacity.
Ensuring that your donee continues certain treatment that you are on that may be considered as alternative in nature. For example, if you wish your donee to continue to bring you for your traditional Chinese medicine treatments after you lose capacity, you may specifically state this in your LPA 2. However, do note that your donee does not have the power to make decisions with respect to the carrying out or continuation of (a) life-sustaining treatment of the Donor, and (b) any other treatment on the donor which the doctor reasonably believes is necessary to prevent a serious deterioration in the donor’s condition.
Unless the donor has an Advance Medical Directive executed, the doctors will carry out life sustaining treatment on the donor in emergency situations.

Your Property and Affairs Donee

Under the LPA 1, your Property and Affairs donees have a wide range of powers including the following:
i. Sign by deed or otherwise all notices, applications, agreements, deeds, documents and forms;
ii. Demand, recover and receive all sums of money payable to me and to give receipts;
iii. Attend and vote at meetings and represent me in proceedings in any court or tribunal or any negotiation or mediation, engage any advocate and solicitor for any purpose in connection with this lasting power of attorney, and accept service of process or any notice or document, and
iv. Obtain information (including confidential information) about me and/or my accounts from third parties. And this shall be my permission to third parties including (but not limited to) the Central Provident Fund Board, banks and financial institutions, insurance companies, healthcare institutions and workers, to release information about me and my accounts to my donee or any third parties as authorised by my donee in accordance with the authority conferred on my donee.

In the case of a business owner, this would mean that your donee would have the power to continue to manage or run the business on your behalf. However, you might want to restrict the scope of your Property and Affairs donee:

In the case where your Property and Affairs donee might have interest in conflict with your business; and/or
When your Property and Affairs donee might not be competent to run the business;

Other reasons why you would want to execute an LPA 2 is because you may want to give direct instructions not to liquidate specific investments or to liquidate them in a specific order. Additionally, you may wish to be more detailed in instructing the donee of the types of investments that he or she may invest your estate in when you are mentally incapacitated.

To prevent conflict: Some of the biggest conflicts in Mental Capacity Act (MCA) cases is when family members do not agree that the donee is acting in the donor’s best interest viz a viz his properties and affairs. After all, every family member who stands to inherit from the donor’s estate would have an existing interest if he is motivated by having the donor use as little as his estate before the donor passes away. While we know that this is obviously wrong and against the spirit of the act, a well drafted LPA 2 would go to certain length in ensuring that the donor’s wishes, while he is mentally incapacitated but still alive, are respected and adhered to.

In this sense, this is why a Lasting Power of Attorney is sometimes referred to as a ‘living will’.

How much does drafting a Lasting Power of Attorney (LPA) cost?

The following details the costs of applying for an LPA 1 and LPA 2 form (note — this does not include any fees if you hire a lawyer):

LPA 1 – $350 (not including disbursements)
LPA 2 – starting from $2000 (not including disbursements)

An LPA 1 is a standard form that involves guiding the donor and donee to fill the form and having it signed before a certificate issuer. For the lawyer to advise the donee and donor about the legality of an LPA 1, this should take about 30min to 45min. Do note however that if you do have many questions about the LPA, you might actually want to enquire about drafting an LPA 2.

As mentioned above, the LPA 2 is a detailed document that allows for greater thoroughness in ensuring that the donor’s wishes and directions are communicated to the donee.

The simple rule of thumb is this: the cost of drafting an LPA largely depends on the complexity of the donor’s wishes and instructions.

Harmony – drafting a will to clarify how you want to dispose of your assets when you pass

While married, two individuals form a couple. As individuals, a spouse might have personal wishes to how to dispose his or her property and assets upon his or her death. Perhaps he/she might wish to leave some property to his/her elderly parents or donate to a favourite charity. Having his/her wishes reflected in a Will would make it crystal clear to his intentions which would be respected.

Having a will that makes the deceased spouse’s wishes clear would help to promote family harmony and having a letter of wishes to specify intent clearly would make it easier for the remaining, grieving beneficiaries to accept the wishes as they are drafted.

Mutual wills – an alternative to individual wills

Alternatively, spouses may make mutual wills with exactly the same terms in order to show their dedication and faithfulness to one another and their family by making identical wills. This is to signal that they intend that their wishes are to be similar.

How much does drafting a will cost?

Drafting a will is relatively inexpensive. It can start from S$300 onwards. The cost will depend on the complexity of your estates. For example, if you have a very diverse holding of assets spanning multiple countries that you want to will to many different parties, this will likely take more time and cost more to draft properly.

As a broad guideline, this is how much it costs to draft the various types of wills at DCMO Law:

Simple will – from $350 (not including disbursements)
Letter of Wishes – time cost of $400 an hour, depending on length (not including disbursements)
Mirror wills – from $600 (not including disbursements)

(Generally, ‘not including disbursements’ refer to the admin charges that is incurred including admin and secretarial support, printing cost etc)

Draft your Lasting Power of Attorney and Will at the same time

It is common for people to draft their Lasting Power of Attorney at the same time that they draft or update their will since they are related. Some firms like ours do offer (DCMO Law) packages to draft them both together.

Wills are typically drafted or updated when:

You get married or remarried
When you get divorced
When you have a young child and grown up children

In the case of DCMO Law:

LPA 1 + Simple Will – $600 (not including disbursements)
LPA 1 + Mirror Wills – $900 (not including disbursements)

Get in touch with Yue-En for matters on Wills, Probates & Trusts

If you wish to get advice for matters on wills probates & trusts, you can have Yue-En call you on the phone within 1-2 days with an Asia Law Network’s Quick Consult for a flat fee of S$49.

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This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.