What if I lose my mental capacity?
I have been working hard for my family, and of course, working hard towards my dream retirement. I am expecting things to go on well. However, life can sometimes be unpredictable. I have heard cases of people having an accident and subsequently lost his mental capacity. When this happens, I always wonder who will be the right person to manage his financial assets as well as take care of his day to day life?
Most person will assume that spouse will be the best person to manage everything.
Is this true all the time?
What if the spouse do not know how to manage money?
So What is Lasting Power of Attorney (LPA)?
The LPA is a legal document which allows a person who to voluntarily appoint one or more persons (‘donee(s)‘) to make decisions and act on his behalf should he lose mental capacity one day.
A donee can be appointed to act in the two broad areas of personal welfare and property & affairs matters.
An LPA will allow your family to make decisions about your personal welfare and finances. It helps ensure that your family can manage your money if you cannot do so.
Why do I need a LPA?
Imagine a father and sole breadwinner having a car accident. After the accident, the father was reduced to a vegetative state and lost his mental capacity. The family now has to take care of the father and at the same time look after the family financial commitments.
Without an LPA, banks will usually not give family members or others access to the father’s funds. The family may then had to go through a longer and more tedious process of applying to the court to manage the father’s affairs. If funds are needed immediately to pay for the care of the father, then those who want to look after the father may be caught in a blind.
Other circumstances that a LPA will come in handy is when a person lose their mental capacity such as getting dementia, suffering from a stroke, or sustaining head trauma in an accident.
Some Benefits of having an LPA
– Allows you to have an early preparations to protect your interests should you lose you mental capacity one day.
– Enables you to appoint someone that your trust and who is competent to take care of you, and to make personal and financial decisions for you
– Reduces the stress on the family loved ones who need to apply for a court order, if you lose mental capacity without a LPA in place.
How to Set up a Lasting Power of Attorney
First, you can start by determining who do you trust and appoint to manage your affairs if you lose your mental capacity. Then check with that person that you intent to appoint to ensure that they are willing to take on the responsibility.
Next, there are 2 forms that you have to decide which one to use. “Form 1” or “Form 2” for your LPA.
Summary of the 2 forms and their functions:
Form 1 – gives the person you appoint wide power to do almost anything you can do.
Form 2 – lists down the scope of activities you allow the person to do. For example, you can specify that you do not want to sell your property etc.
The forms are available to downloand from the link below: https://www.publicguardian.gov.sg/OPG/Pages/Forms.aspx
Afrer this, you can do the application for a Lasting Power of Attorney by:
1. Filling in the relevant form you like to use
2. Have the form certified
3. Register your Lasting Power of Attorney
Note:
For Form 1 for Singaporeans, you will need a medical practitioner, psychiatrist or lawyer to certify the LPA.
For Form 2, the lawyer who drafted the LPA’s powers can likely also certify the LPA.
Powers of the Donee
The donee is given the power to make decisions on the donor’s personal welfare and/or property and financial matters including where a donor is to live and how he is to be cared for. The donee can also access the donor bank accounts. As such, the donee, must act in the best interests of the donor.
How to Revoke a Lasting Power of Attorney
The LPA is revoked in certain conditions outlined in section 15 of the Mental Capacity Act. When the donor recovers his mental capacity, he can revoke the LPA.