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Guide to Lasting Power of Attorney

GUIDE TO LASTING POWER OF ATTORNEY

A Lasting Power of Attorney (LPA) is a legal document that appoints someone you trust to make decisions on your behalf if you can no longer make them yourself. Getting legal advice from a lawyer when creating your LPA is vital, as some specific forms and procedures must be followed. Our team has years of experience dealing with the Office of Public Guardian, so we can guide you through the process and ensure your LPA is correctly created and registered.

1.  Who Are The People Most Affected?

Around 10% of the Singapore population is at or above retirement age. Many of them are fit, healthy and capable of looking after themselves. But illness and accident can strike anyone, anytime, when least expected.

 

2.  How Can A LPA Help Me?

Many people plan for the future by saving, investing, and buying insurance. They want to be prepared for any possible scenario. Few people think about the possibility of losing their mental capacity which is a real challenge to our physical and emotional well-being. Planning for this event can undoubtedly help reduce stress for our family members.

A LPA helps you appoint people you trust to act on your behalf if you should lose mental capacity. A LPA can give you peace of mind, knowing that your wishes will be carried out even if you cannot communicate them when you are mentally incapacitated.

 

3.  What Is the Difference Between A LPA And A Power of Attorney?

A LPA is only effective when you lose your mental capacity.

A Power of Attorney is only effective when you still have your mental capacity and the scope of powers of your Attorney to act within the powers given by you. If you lose your mental capacity, the powers granted under the Power of Attorney shall be invalid or ineffective.

 

4.  What Could Happen If I Don’t Make A LPA?

Losing one’s mental capacity is not just for the elderly; younger people may become incapacitated through accident or illness. When someone suffers a loss of mental capacity, they can no longer make decisions for themselves and need someone else to do so. This can be difficult for both the individual and their loved ones.

Without a LPA, your family will have to apply to the court to get access and take control of your assets and finances. Applying to the court can be expensive and time-consuming, and there is no guarantee that the court will grant authority to your family members. Making a LPA ensures that your wishes are carried out quickly and efficiently if you become incapacitated.

 

5.  When Does A LPA Take Effect?

A LPA will only take effect if you lose mental capacity and a registered medical practitioner has verified your condition.

 

6.  How Do I Make A LPA?

To make a LPA, there are 2 forms which you can use.

 

LPA Form 1 – Standard Form

The standard form is the most commonly used, allowing the Donor to grant general powers to the Donee with some basic restrictions. 98% of Singapore Citizens who have made a LPA used the LPA Form 1.

The 2 general powers granted in LPA Form 1 are:-

(a)  the Personal and Welfare “power,” deals with matters that involve the person’s well-being. The decisions about the person’s health, where they should be cared for and how. It also involves the medical decisions that may have to be made. These decisions could even have life or death implications.

(b)  the Property and Affairs “power,” deals with matters that involve a person’s belongings and financial situation. It can be pretty mundane, like paying bills, checking that their bank account is in order, looking after investments, etc.

 

LPA Form 2 – Customised Form

The comprehensive form is more complex, allowing the Donor to grant specific powers to the Donee. It also includes more detailed restrictions on the use of the power. Only 2% of Singapore Citizens who have made a LPA used the LPA Form 2.

 

6.  Whom Can I Appoint As My Attorney?

You may appoint anyone you trust to make decisions on your behalf, in your best interests, as your Attorney as long as (1) they are over 21 years old; (2) not bankrupt, and (3) are willing to take on the role as your Attorney, which is a serious responsibility.

ISSUES TO CONSIDER

1.  Whom do you wish to be your Attorney?

2.  Do you want to appoint more than 1 Attorney?

3.  If your Attorney cannot act, do you want to appoint a replacement Attorney?

4.  If you have more than 1 Attorney, do you want them to make joint decisions (i.e. cannot act separately), or can they make decisions separately?

Speak to us over video consultation via Lawyer Anywhere for assistance with your LPA. We can walk you through the process and answer any questions you may have.

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Checklist : Estate Planning

CHECKLIST : ESTATE PLANNING

Estate planning is a necessary process that everyone should go through. It can be easy to put off, but it’s essential to have a plan in place in case something happens to you. Taking the time to plan your estate now can save your loved ones a lot of heartaches and stress later. If you don’t have a Will or if your estate planning documents are outdated, now is the time to take action. Use this checklist to start estate planning or review your current plans.

1.  Will

Make a Will – This is the most important estate planning document because it ensures your wishes are carried out and your loved ones are provided for. Without a Will, the law will distribute your assets, which may not be your wish. Without a Will, your loved ones may have to go to court to resolve disputes over your assets, which is expensive and time-consuming. Therefore, it is vital to take the time to create a Will that accurately reflects your wishes.

People often write their own Wills. Even though you can do it without a lawyer, it is strongly recommended that you work with an experienced one. A lawyer will ensure that your papers are foolproof and protect you and your family from long court probates.

Choosing an executor – An executor is responsible for managing the distribution of assets in an estate. The executor doesn’t have to be a lawyer. Your children, a family member, or a close friend can all take on this role. Once you’ve chosen an executor, you should introduce them to your lawyer, even if they won’t have to work together for years or decades. And remember that you can always change who will carry out your wishes.

Naming your beneficiaries – It is essential to name who will get your assets. It would be best if you designated a beneficiary for every asset you own. This ensures that your assets will be distributed according to your wishes in the event of your death.

 

2.  Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is a legal document that appoints a trusted third party to make decisions on your behalf if you become incapacitated.

When people lose their mental capacity, they can no longer make their own decisions and must rely on others. This situation can be challenging for both the individual and their loved ones.

Without an LPA, your family will have to file a court petition to gain access to and control of your assets and finances. The court application process can be costly and time-consuming, and there is no assurance that the court will grant your family members control.

By executing an LPA, you can ensure that your wishes are carried out swiftly and efficiently if you become incapable.

 

3.  Advance Medical Directive

It’s essential to make sure family members and friends are aware of your medical treatment wishes before a health care crisis takes these decisions out of your hands.

An Advance Medical Directive (AMD), also known as a Living Will, is a legal document you sign when you are still mentally competent. This document expresses your wishes to the medical team treating you, regarding the use of extraordinary life-sustaining treatments when you are terminally ill, mentally incompetent or unconscious. By signing this document, you are giving your medical team the authority to make decisions about your care based on your expressed wishes. This can be a valuable tool in ensuring that your wishes are followed if you cannot communicate them yourself.

Making an AMD is entirely optional, and you can revoke the AMD at any time.

It is essential to understand the difference between an AMD and euthanasia. Euthanasia is the deliberate ending of the life of a person suffering from an incurable and painful disease. An AMD instructs your doctor not to proceed with extraordinary life-sustaining treatment and allows you to die naturally when you become terminally ill and unconscious while minimising suffering through palliative care and medication.

 

4.  Creating A “Need to Know” File

Once you’ve made these critical decisions, it’s important to communicate them ahead of time to those who will be most impacted.

By creating a comprehensive “Need to Know” file, you can make it easy for them to access the information they need to carry out your wishes. Your “Need to Know” should include your wishes for medical care, funeral arrangements, and other vital instructions. It is essential to keep this file up to date, as your wishes may change over time. Making these decisions in advance can help ease the burden on your loved ones during a difficult time. It can also help ensure that your wishes are carried out precisely as you desire.

FINAL TIP: Your estate plan will also need to evolve because your life circumstances are ever-evolving. Your Will and estate plan should be reviewed once every 3 to 5 years or whenever a major life change, like marriage or purchasing a property.

Speak to us over video consultation via Lawyer Anywhere for advice on your Estate Planning matters today!

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Asset Management Not Wealth Management

ASSET MANAGEMENT ≠ WEALTH MANAGEMENT

Asset Management and Wealth Management are often used interchangeably but what is essential to understand is the difference between them. While both services target to impact your financial services positively, the scope of their services varies greatly.

As its name suggests, asset management is the management of your assets. Asset management aims to grow your current pool of assets while mitigating the risks taken.

Wealth management encompasses asset management. The goal of wealth management is to protect you and your family’s wealth, which involves legacy and tax planning.

Key Differences Between Asset Management & Wealth Management

 Asset ManagementWealth Management
MeaningManagement of assets of clientsManagement of all financial aspects of the client
Focus

Narrow Approach

Focused on building your investment portfolio

Wide approach

Focused on protecting your family’s wealth involves tax planning. 

FunctionManagement of investments/assets, risk-return legacy analysis, strategy formulation for asset management, identification of “suitable” assetsManagement of investments/assets & portfolios, tax planning, estate planning, insurance, education planning, retirement planning, charitable contribution
Approach

Offer products “suitable” for the client

Creative approach to offer in-house products through their financial expertise and direct involvement in the market

Required (“fiduciary duty”) to put client’s interest before self

Process-driven approach involving coordination of inputs from financial experts, lawyers, accountants, insurance agents and other specialists required for financial management

Compensation

Usually, a commission is based on product sales. 

May give rise to a conflict of interest

Retainer fee-based along a fee for the asset under management 

Favours impartiality in recommendations

Typical service providersBankers (Privilege & Private); External Asset ManagersExternal Asset Managers; Investment Advisers
Typical AUM From S$1million upwardsFrom S$10million upwards
Which approach is most suited for you?

There isn’t a one-size-fits-all solution.

At different milestones in your life, you will have set out different goals that you set out for yourself. While both approaches are targeted at positively impacting your financial situation, their suitability depends on your personal needs.

A wealth manager will be able to help you boost the efficiency of your monies, gain insights into estate planning and reduce tax on family assets.

On the other hand, if the only thing you require at the moment is expert investment advice, then asset management might be the better solution.

Working with asset/wealth managers can be a great way to improve your financial situation. They can help you grow your investments. Not all asset/wealth managers are the same. Who can you trust?

First, you should check to see if they are regulated, as all individuals providing financial services in Singapore are required to be regulated. Examine their credentials, including their experience and track record. While past performance does not guarantee future results, it is a good indicator of whether they will work for you. Other considerations would be the availability of portfolio valuation reports, transparency, and competitive fees.

The most crucial step is meeting with a few different managers to determine which one is the best fit for you. You should feel comfortable with your manager and confident they have your best interests at heart.

When managing your finances, it’s essential to get the right advice. If you’re unsure whether you need to hire an asset manager or a wealth manager, speak to us via video consultation via Lawyer Anywhere. We can discuss your needs and recommend the best solution for you.
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Wills v Trusts

WILLS V TRUSTS

People use two primary estate planning documents to plan for the distribution of their assets after death: Wills and Trusts. Both have advantages and disadvantages, so it is important to understand the difference between them before making a decision.

Most people are familiar with the concept of a Will – it’s a legal document that outlines how you want your assets to be distributed after you die. If you don’t have a Will, your assets will be distributed according to prevailing law. 

A trust, on the other hand, is a bit more complex. A trust is a legal arrangement in which you (the trustor) transfer ownership of your assets to a trustee, who then manages and distributes those assets according to the terms of the trust. Different types of trust can be used for a variety of purposes. A revocable trust is a type of trust that can be amended during the grantor’s lifetime, while an irrevocable trust cannot be amended. Trusts can be used for estate planning, asset protection, and charitable giving.

Key Differences Between Wills And Trusts

When it comes to estate planning, many people are unsure of whether a Will or a Trust is the best option for their situation. While both options can effectively handle your affairs, there are some key differences to understand before making a decision.

1.  Effective Date

A Will does not go into effect until after you die, whereas a Trust is active once it is created and funded. This means that a Trust can be used to manage assets during your lifetime, which can be helpful if you become incapacitated or otherwise unable to manage your affairs, something a Will cannot do.

2.  Probate And Privacy

When a person dies, their estate must go through probate to confirm the Will and allow distribution of assets. Probate is a process that a probate court oversees, and it can be lengthy and expensive. If a person dies without a Will, the process is often even more complicated and can take longer and cost more.

The key feature of a Trust is that it is not subject to probate because they are not considered part of a person’s estate. This means that Trusts avoid the time-consuming court proceedings and costs associated with probate.

While a Will is typically considered a private document, the reality is that anything that happens in court is available to the public through public records. As Trusts are not subject to probate, matters can be kept private. This can benefit individuals who want to keep their affairs confidential and out of the public eye.

3.  Complexity And Cost

The cost of preparing a Will is relatively cheap and straightforward. However, Trusts can be complex and require more paperwork to establish, so they are generally more costly to organise upfront than Wills. However, avoiding probate down the road can offset the cost of setting up a Trust.

4.  Protection From Creditors

A Will is a legal document that dictates how a person’s assets will be distributed after death. However, if that person has creditors, those creditors may be able to claim against the Will.

Trusts offer asset protection from creditors, and the trust creator can condition asset allocation to family members during certain events or place restrictions on beneficiaries’ receipt of assets. This means that you can control how your assets are used even after you’re gone.

Will or Trust or Both?

When it comes to estate planning, a Will may be all you need – but if you have more complex financial affairs or want to take extra measures to protect your assets, a Trust could be the best solution.

Be sure to consult an experienced lawyer to discuss your best options and devise a plan that will work best for you and your family.

Speak to us over video consultation via Lawyer Anywhere for advice on your Estate Planning Matters today!

Susan Tan

Senior Legal Executive

Qualifications:

With more than 10 years of experience in the financial industry, Susan Tan, who joined us from one of the leading corporate and investment banks in Singapore, provides invaluable expertise and knowledge in corporate secretarial.

She is conversant and familiar with the local regulations and requirements for business entities in Singapore.

As a member of our team, Susan is responsible for maintaining and updating the Company’s statutory registers and records, filing all necessary documents and forms with the Accounting & Corporate Regulatory Authority (ACRA), Ad-hoc assignments such as allotment and transfer of shares, amendment of Company’s Constitution and submission of Annual Return to ACRA.

Apart from corporate secretarial work, Susan has considerable experience and expertise in compliance advisory matters, making her a valuable member of our firm.