If you have $40 million in assets, who would you trust to look after them?

Apparently, Madam Chung Khin Chun, a wealthy widow with so much money, trusted her former China tour guide, Mr Yang Yin to take complete control of it. She was allegedly manipulated to grant a Lasting Power of Attorney (LPA) to Yang Yin, now being sued by Madam Chung’s niece, Madam Hedy Mok.

Mr Yang Yin was accused of neglecting their legal caretaker duties. It was also reported that together with his wife Madam Weng Yandan, Mr Yang Yin ‘flaunted’ their expensive lifestyles, where the source of wealth is questionable.

At the same time, there is another high-profile case. Mr Gabriel Ng, the son of former SA Tours boss Ng Kong Yeam is challenging the LPA that his father granted to Madam Kay Swee Pin in 2011.

So what is Lasting Power of Attorney (LPA) all about?

Many people had not even heard of it until this news sprawled all over Singapore in recent months.

Basically, an LPA is a legal document which allows you (the Donor) to appoint someone else to make decisions and act on your behalf if you lose the mental ability to make these decisions yourself in the future. Anyone can be appointed as a Donee, as long as the person is at least 21 years old. When activated, donees can make key decisions on his personal welfare and financial matters, along with legal caretaking responsibilities for the doner.

So far, only 6,500 Singaporeans have signed up under the LPA scheme since it started in 2010. Below is the typical process to set up LPA.

Why the current LPA system needs to be improved

LPA is currently administered by the Office of the Public Guardian (OPG), which now comes under the Ministry of Social and Family Development. I have attended several seminars and workshops about it, but I feel the system has a lot of room for improvement.

The Certificate Issuer

To issue an LPA, you need to find a “Certificate Issuer” to sign as your witness and to “certify that you know the implications of making an LPA”. Who do you think is qualified as Certificate Issuer? According to OPG

1. A medical practitioner accredited by the Public Guardian;
2. A practising lawyer; or
3. A registered psychiatrist

While a medical practitioner and psychiatrist may be able to establish the mental soundness of the Donor, and a lawyer may be able to understand the legal implication of LPA. In my opinion, either of these professionals may not be adequate to fulfil the “certification” process.

Moreover, the fees a doctor or lawyer can charge for such services are practically less than $100, so there is little “incentive” for them to fully comprehend the LPA system and spend enough time with the donor for “advice”.

The accountability of Public Guardian and the Donee

In September 2008, Mental Capacity Act was established to enable the setting up of the LPA scheme. Since then, the issue of safeguards was already debated extensively.

As speaker of Parliament Halimah Yacob, then a backbench MP, pointed out that “the Bill gives proxy decision-makers power without too much accountability”.

When I say safeguard, it is not about ticking the box and filling up the paperwork.

It may be shocking to many that OPG is not even aware how many donees of the 6,500 LPAs have already started using their powers because currently there is no requirement for donees to tell the OPG when they start using their LPAs.

There is also no requirement for donees to produce medical reports to show that donors have lost their mental capacities when they use the LPAs, though most banks require donees to do so.

While it is understood that family relationships are complex and each situation is unique, it is the public confidence in the scheme that OPG must be careful.

What can the authorities do better?

There was a recent article in the Straits Times suggesting some areas of improvement, including

1. Notification of authorities when LPA is applied
2. Compulsory documentation of doner’s medical incapability when LPA is applied
3. Sound alarm if an unrelated person is appointed donee

There are also practical issues. As what the article “I’ve power of attorney, so why am I so powerless?” pointed out, many times, donees of LPA face challenges with organisations such as banks when carrying out their legal duties, restricting their legal powers as a donee.

Although this is a UK case, I will not be surprised to see such a thing in Singapore as there are so few LPA cases. 6,500 LPAs? That is 0.01% of the population.

Now it was reported that after confirmation from a psychiatrist examination, Madam Chung is now ready to revoke the LPA, though suffering from dementia. We have yet to see a final outcome of this case, but it is a good wake-up call and hopefully, the authorities realize the importance of public education for such schemes.

Questions:

What are your experiences with LPA? Would you apply a Lasting Power of Attorney for yourself? Feel free to leave your comment below.