Understanding the Process and Key Considerations
The Lasting Power of Attorney (LPA) Form 2 is a crucial estate planning tool that allows an individual (the donor) to appoint one or more trusted individuals (the donee(s)) to make decisions on their behalf in the event of mental incapacity. While many focus on the preparation and registration of an LPA, understanding what happens when it is activated is equally important.
This article provides a structured overview of the activation process, legal considerations, and
challenges that may arise under Singapore’s regulatory framework.
1. When is an LPA Form 2 Activated?
STEP 1
An LPA takes effect only when the donor is assessed to have lost mental capacity and is no longer able to make decisions regarding their personal welfare or financial matters.
Common conditions that may lead to mental incapacity include:
- Neurodegenerative diseases such as Alzheimer’s or vascular dementia
- Severe strokes or traumatic brain injuries
- Neurological disorders such as Parkinson’s disease
- Medical conditions causing cognitive impairment
A formal medical certification of incapacity must be obtained from a Singapore-registered medical practitioner, such as a general physician, psychiatrist, or neurologist. This certification is required before the LPA can be activated.
Once mental incapacity is established, the appointed donee(s) can proceed with the activation process through the Office of the Public Guardian (OPG).
2. Steps Following LPA Activation
STEP 2
Obtaining Medical Certification
- The donor undergoes a medical assessment by a qualified doctor who issues a formal certificate of mental incapacity.
- This document serves as evidence that the donor is unable to make informed decisions.
STEP 3
Notifying the Office of the Public Guardian (OPG)
- The donee must notify OPG and submit the following documents:
- The original registered LPA Form 2
- The medical certificate of incapacity
- The donee’s identification documents (if requested)
- OPG will review the submission to ensure that all
procedural requirements are met.
STEP 4
Assumption of Decision-Making Authority
- The donee assumes legal authority over the donor’s matters as specified in the LPA Form 2.
- Decision-making authority may include:
- Financial matters – Managing bank accounts, investments, insurance policies, and property transactions.
- Personal welfare – Overseeing medical care and daily living arrangements (if covered in the LPA).
- Business affairs – Handling business assets and operational matters (if permitted under the LPA).
Financial and Legal Responsibilities
- The donee is responsible for ensuring the donor’s financial stability and settling any necessary payments for medical care, insurance, or other obligations.
- If the LPA involves the management or sale of real estate, additional court approval may be required.
- Financial records must be meticulously maintained to ensure transparency and compliance with OPG regulations.
STEP 5
Ongoing Duties and Compliance with OPG Regulations
- Donees must always act in the best interests of the donor, exercising reasonable care and diligence in all decisions.
- If required, OPG may request annual financial reporting to ensure that funds are properly managed.
- If there are allegations of mismanagement or abuse, OPG may conduct investigations and, if necessary, revoke the donee’s authority.
3. Challenges and Disputes Following LPA Activation
While the LPA provides a structured framework for decision-making, disputes may arise due to concerns over financial mismanagement, family disagreements, or allegations of undue influence.
Case Study: LPA Dispute in Singapore
A notable case in Singapore involved a family dispute over a father’s LPA, which granted one son exclusive control over his financial affairs. After the LPA was activated due to the father’s diagnosis of dementia, other family members raised concerns that the donee had been misusing funds for personal gain.
Following an investigation by OPG and subsequent legal proceedings, the Family Justice Courts found evidence of financial discrepancies, leading to the donee’s removal and the appointment of an independent party to manage the donor’s affairs. This case underscores the importance of transparency, accountability, and adherence to the LPA’s scope. Donees must be prepared to justify financial decisions and maintain clear records to avoid disputes or legal challenges.
4. Termination of an LPA
An LPA automatically ceases under the following circumstances:
- The donor regains mental capacity – If a new medical assessment confirms the donor’s ability to make decisions, the LPA will no longer be in effect.
- The donor passes away – The LPA is immediately revoked, and estate matters will be managed through a Will (if applicable) or intestacy laws.
- The donee resigns, loses capacity, or passes away – If no replacement donee is listed, a new LPA may be required.
- Revocation by the Family Justice Courts – In cases of misconduct, OPG or affected family members may seek legal intervention to revoke the LPA.
Key Takeaways
- Activation of an LPA requires formal medical certification and verification by OPG before the donee can assume authority.
- Donees must exercise care, integrity, and accountability in managing financial and personal affairs.
- Family disputes may arise, making transparent financial documentation essential in preventing allegations of misuse.
- If concerns arise, affected parties may seek intervention from OPG or the Family Justice Courts.
Understanding the activation process is vital for all stakeholders. For those with an existing LPA, reviewing its terms and ensuring alignment with personal and family expectations can help mitigate potential conflicts in the future.
This article was first published in our newsletter, The Custodian Issue 33. Click here to access our latest newsletter.
