In Singapore, it is estimated that one in 10 people aged 60 years old and above has dementia. With higher life expectancy, the number of people with dementia is expected to increase. This is a serious problem, not only for dementia sufferers, but also for their families, the Government and health authorities.
At the individual level, dementia has an impact on many aspects of daily life. These include forgetfulness, confusion, problems communicating, mood swings and difficulties in doing familiar tasks. Many people with dementia will reach a point where they can no longer make decisions for themselves.
As an example, say John is diagnosed with early stages of dementia when he is 65 years old. Prior to the diagnosis, he lived a full life, making all the decisions for himself and his family. However, the diagnosis set some alarm bells ringing in John’s mind. While he felt confident enough to look after himself for now, he was not sure what the future held. This made him scared.
Some scenarios went through his mind. What if I can’t remember whether I paid for my water and electricity bill, he thought. What if I forget my medication? Or take the same medication twice? These were worrying thoughts, even if they seemed far off at that time. He felt alert and well, even with his dementia diagnosis.
What can John and others in his position do then? There is a legal tool available for individuals to make provisions for the possibility that they may lose their mental capacity later in their lives and be unable to handle their daily affairs. This tool is the Lasting Power of Attorney (LPA), which allows individuals to nominate others to make decisions on their behalf should they ever become unable to do so.
An LPA is a legal document that allows a person who is 21 years of age or older to plan the management of his affairs in the event of a loss of mental capacity. In the LPA, the person making the LPA – known as the donor – appoints a person – known as the donee – to act and make decisions on his or her behalf.
A donee should be someone who is trusted, reliable and competent to act on your behalf. The use of an LPA is especially important if a person is a sole breadwinner for the family or has a history of health problems. More than one donor can also be nominated in an LPA – they are called donees.
It should be stressed that if a person has recently been diagnosed with dementia, there is a need to act quickly as an LPA can still be set up providing the person still has the mental capacity. A dementia diagnosis does not necessarily mean that a person has lost mental capacity. If a person is showing early signs of dementia, he or she may still be able to make informed decisions. If this is the case, an LPA can usually be set up for them.
LPA Form 1 vs LPA Form 2
We note that there are two types of LPA forms in Singapore. LPA Form 1 is the standard version that grants general powers with basic restrictions to a donee or donees. According to the Office of the Public Guardian, 98% of Singapore citizens who have made an LPA used the LPA Form 1.
For LPA Form 2, there are the following unique features which caters to those who has more needs.
- LPA Form 2 is for those who have non-standard requirements and wish to grant customised powers to their donees. This form needs to be drafted by a lawyer.
- LPA Form 2 is for people who wish to appoint either more than two donees and 1 replacement donee. LPA Form 1 only allows no more than two donees. The replacement donee may replace an existing donee if the latter dies or becomes bankrupt or loses mental capacity. There is also the possibility that the donee gives notice to Office of the Public Guardian that he disclaims his appointment when he does not wish to be a donee anymore.
- LPA Form 2 allows the Donor to grant specific and customised powers to donees which cannot be addressed in LPA Form 1. For example, if the Donor prefers to give more specific instructions on how their assets can be used for his done, then a Form 2 would be more suitable. For example, an aged 40+ father may be more inclined to provide more instructions on how his assets can be used for the care of his children. A parent of a special needs child or a financially challenged adult child may like to provide more specific instructions on how his assets are managed for the special needs child or a delinquent adult child.
- LPA Form 2 allows the Donor to appoint a Trust company as a Property and Affairs Donee. Under the Mental Capacity Regulations 2010 Part II.5, licensed trust companies are prescribed persons who may be appointed as done of a lasting power of attorney in respect of a donor’s property and affairs. For many singles or widowed persons, they may be concerned of the lack of suitable persons to handle their financial affairs when they are mentally incapacitated. They may have friends or relatives who are open to care for them as personal welfare donee but are not comfortable with tasked with a role that carries substantial fiduciary duties.
This is especially so if their assets are substantial, or complex. In some cases, couples without children or with children who resides overseas would prefer to choose a licensed trust company as their replacement donee in case their spouse predecease them or is unable to act or their children are residing at a distance when they are mentally incapacitated.
Getting an LPA done
In general, the issuer of the LPA certificate must be a practising lawyer, a registered psychiatrist or a medical practitioner accredited by the Office of the Public Guardian. They must ensure that the donor understands the purpose and scope of the LPA. Without an LPA, a court order would have to be obtained in order to administer the affairs of a person who lacks mental capacity. This can be both time-consuming and expensive.
The Office Of Public Guardian had launched their online LPA registration platform: OPGO, making it easier for the public to make their LPA.
Financial advisors who are keen to learn how more the LPA and the role of the licensed trust company may attend the AEPP® course to find out more.
For persons who became mentally incapacitated without an LPA, the court appoints a person to be the court-appointed deputy to manage the affairs of the person who lacks mental capacity. The challenges are as follows. The person suffering from dementia then does not have a say on who becomes the deputy. The family members may tussle among themselves in court on who will be the deputy. Further the court is likely to limit the powers of the deputy, hence requiring the deputy to submit to court for permissions for many matters. For example, leasing out a property to fund the medical needs of the person.
Finally, it should also be noted that LPAs made in Singapore will not be recognised in other countries and vice versa. If a person has overseas properties or spends a lot of time overseas, it is prudent to get an LPA done in the countries that they spend a lot of time in as well. Notably, LPA legislation is very new across the world, many countries have not enacted similar laws.