Picture this. One day, you’re unable to make the crucial life decisions that shape your future, from managing your finances to selecting your healthcare.

Sounds scary, right?

Let’s take a closer look at Madam Chung Khin Chun’s story.

Madam Chung, an elderly Singaporean woman, was initially befriended by Mr Yang Yin, a former tour guide from China. Over time, he gained her trust and gradually took on roles as her tour guide, legal advisor, and personal representative.

Mr Yang Yin utilized his position to manipulate Madam Chung, ultimately deceiving her and misappropriating her assets. He allegedly convinced her to make changes to her will, granting him control over her finances, and even persuaded her to transfer ownership of her valuable bungalow to him!

This story serves as a cautionary tale, reminding us of the importance of the need for robust safeguards to prevent financial exploitation and fraud.

Source: The Straits Times

Naturally, we all want control over our life decisions. To safeguard that autonomy, the LPA becomes a critical tool.

Such stories highlight the essential role a Lasting Power of Attorney (LPA) plays in our lives. LPA has come a long way in Singapore. Since I talked about this some years ago, there are many new developments in LPA, so I decided to write an update.

In this post, we’ll dive into:

  • What exactly is an LPA
  • The key benefits of having an LPA
  • The steps to create one

Let’s start with the basics.

What is an LPA?

A Lasting Power of Attorney, or LPA, is a vital legal document that empowers someone you trust to make decisions on your behalf if you’re ever unable to do so.

With an LPA, you can ensure your interests remain protected, and the decision-making is in the hands of someone you trust. This trusted individual, or Donee, must be at least 21 years old.

Once your LPA is activated, your Donee takes over the responsibility of making critical decisions relating to your personal welfare, financial affairs, and legal matters.

These powers include decision-making related to:

  • Your personal welfare,
  • Your property and affairs, or
  • Both your personal welfare and property and affairs.

The Benefits of an LPA

An LPA offers more than just legal safeguards. It provides you with the power to shape your future and maintain control over essential aspects of your life:

  • It reduces stress and anxiety for you and your family.
  • It is an effective tool to navigate life’s uncertainties.

Yet, the Ministry of Social and Family Development reported that only 100,000 LPAs were registered in Singapore as of September 2021. This statistic highlights a gap in awareness about the importance of planning for the future.

How an LPA Protects Against Life’s Unknowns

Life is unpredictable. Without appropriate planning, we may struggle to navigate unexpected challenges.

Let’s consider three scenarios:

Unexpected Incapacitation – Suppose you suffer a stroke out of the blue, and you are temporarily unable to communicate your medical or financial wishes. Without an LPA, your Donee can’t make crucial decisions for you, potentially delaying treatment and recovery.

Loss of Decision-Making Capacity – As we age, dementia becomes a real possibility, slowly eroding cognitive abilities. Without an LPA, conflicts over your property and affairs can arise among family members, threatening your well-being and assets.

Sudden Accident or Traumatic Event – If you fall into a coma after an unexpected accident requiring long-term medical care, an LPA is invaluable. Without a Donee in place, there’s no one to make critical decisions on your behalf, impacting your recovery and the management of your affairs.

Creating Your LPA

The process of creating an LPA can seem overwhelming, but let’s break it down:

  1. Donor completes the LPA online.
  2. Donee accepts the appointment.
  3. Certificate issuer (CI) certifies and witnesses the donor’s signing of the LPA.

Wondering who a Certificate Issuer is? They’re a critical part of the LPA creation process. They sign as your witness and certify that you understand the implications of creating an LPA.

Potential Certificate Issuers include:

  • An accredited medical practitioner by the Public Guardian
  • A practising lawyer
  • A registered psychiatrist

LPA and Will Writing: Two Sides of the Same Coin

While an LPA protects you during your lifetime, a well-drafted will ensures your legacy is preserved after you pass.

Writing a will might seem straightforward, but it’s rarely as simple as it appears. You could be overlooking crucial aspects without even realizing it.

To help you navigate these critical areas, I’m hosting an online workshop on LPA and writing a will. The workshop features Patrick Chang from SimplyWills, an experienced professional who has conducted over 1,000 Will Writing Workshops and Webinars.

In this session, you’ll learn how to create a will and the process of doing an LPA and get it certified.

Don’t wait for a crisis to strike before setting up your LPA.

Sign up here.

I hope this article has shed light on the importance of an LPA. If you have any questions or comments, feel free to write them below, or join our Telegram community for more discussions.

Stay informed and take control of your future today!

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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