Book Appointment Now

Tag: Personal Law

Categories
Articles

Answers To Your Questions On The Lasting Power of Attorney (LPA)

lpa
#image_title

ANSWERS TO YOUR QUESTIONS ON THE LASTING POWER OF ATTORNEY (LPA)

1. What Is A Lasting Power Of Attorney?

  • When a person loses his mental capacity (e.g. stroke, dementia, coma), he cannot decide matters for himself.
  • A Lasting Power of Attorney (“LPA”) is a formal legal document that allows you to appoint someone (the Donee) to make decisions about your financial and healthcare issues if you should lose mental capacity.

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

  • An 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.

3. If I Have A LPA, Do I Still Need A Will?

  • The purposes of an LPA and a Will are different.
  • An LPA is only effective when one loses mental capacity and will lose its effect upon death.
  • On the other hand, a Will is only effective upon the Testator’s (the one making the Will) death.
  • It is recommended that everyone has both an LPA and a Will.

4. Is An Advanced Medical Directive Similar To A LPA?

  • No. These 2 documents are different.
  • An Advance Medical Directive (AMD) is a legal document declaring that you do not want any life-sustaining treatment to be used to prolong your life if you become terminally ill and unconscious and where death is imminent.
  • The LPA does have similar provisions. However, it relates to the Personal Welfare powers – it seeks confirmation whether you wish to provide your Donee with the authority to continue or discontinue treatment, including participation in clinical trials.
    • The appointed Donee will solely make these decisions.

5. What Is The Key Benefit Of A LPA?

  • The LPA allows you to choose the person, i.e. someone you trust and believe to be reliable and competent, to make decisions and act on your behalf should you become vulnerable when you lose your mental capacity.

6. Who Can Make A LPA?

  • Any person over 21 with mental capacity can make an LPA.

7. Can I Appoint 2 Donees?

  • Yes, you can. You can appoint as many Donees as you want, although they must be 21, of sound mind and not bankrupt.

8. Do I Need To Get My Donee’s Consent?

  • Yes, the Donee must be informed, and he must give his consent.
  • In addition, he is required to complete his particulars in the LPA form.

9. Can My Daughter/Son Make A LPA On My Behalf?

  • No, only you can make the LPA.

10. My Son Lives in London. Can He Still Be A Donee?

  • Yes, he can, but do consider whether he is suitable to be a Donee.
  • For example, what would happen if an emergency arose and the Donee was needed immediately?

11. What Types Of Powers Are Given In A LPA?

There 2 types of general powers given in an LPA:

  • Property & Affairs
    • Property & 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.
  • Personal Welfare
    • Personal 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.

12. Can I Use My LPA Once All Relevant Parties Have Signed It?

  • No, the LPA must be registered with the Office of Public Guardian before it can be used.
  • The registration process involves completing separate forms and submitting the registration fee.

13. Can I Revoke My LPA

  • Yes. You can revoke your LPA any time if you are of sound mind.

14. What Happens If I Don’t Make an LPA And Lose My Mental Capacity?

If you do not make an LPA and subsequently lose your mental capacity to make certain decisions, then someone must make an application to the court, under the Mental Capacity Act, for an order to either:. (i) make the specific decisions for you, or (ii) appoint one or more persons to be your deputy to decide for you.

Contact us via Lawyer Anywhere for assistance with your LPA. We can walk you through the process and answer any questions.

RELATED ARTICLES

Categories
Articles

Refinancing : A Full Breakdown Of How You Can Really Save Money

#image_title

REFINANCING : A FULL BREAKDOWN OF HOW YOU CAN REALLY SAVE MONEY

Suppose you are interested in saving money on your mortgage. In that case, this article aims to help you better understand how refinancing or repricing your mortgage can help you do that.

What exactly is the “refinancing/repricing” business all about?

Refinancing means replacing your current housing loan with another – one with a much lower interest rate.

Most of us in Singapore are proud owners of our homes, and we would have taken up a housing loan when we purchased our homes.

  • “When was the last time you took a good look at your housing loan statement?”
  • “Are you still enjoying the promotional rates offered by the bank?”

Being all excited to be proud owners, we are occupied with ideas of how to renovate & decorate our new home.

The 10-page letter of offer filled with legal jargon provided to us by the bank officer would be signed and sealed with little thinking.

We are the least bit affected by the bank officer’s notification that the loan period is for 25 years.

Little do we realise that for most of us, our current housing loan is secured by a mortgage based on the promotional rates offered by the bank at the time of the loan.

These promotional rates would only be low for the first couple of years (maximum 3 years); the rates would have gotten progressively higher.

 

Benefits Of Refinancing

  • Refinancing is one of the best ways to save money on your mortgage to refinance your mortgage at a lower interest rate.
  • In addition, you can reduce your monthly mortgage payments by refinancing your mortgage.
  • Another benefit of refinancing your mortgage is getting a longer loan term. This may allow you to keep your monthly payments low.

If you are interested in refinancing your mortgage, it is essential to compare the interest rates of several lenders to find the best interest rate.

Can we save money by refinancing?

What are the actual savings?

Generally, we can save money by refinancing!

 

Illustration Of Actual Savings

CURRENT SITUATION – Loan Amount $800,000/- @ 5.5% p.a.

Year

Current Rates

Current Instalment

Total Payment Per Year

1

5.50%

$4,642.31

$55,707.72

2

5.50%

$4,642.31

$55,707.72

3

5.50%

$4,642.31

$55,707.72

4

5.50%

$4,642.31

$55,707.72

5

5.50%

$4,642.31

$55,707.72

NEW PROMOTIONAL RATES OFFERED BY BANKS Loan Amount $800,000/- @ 1.25% (1st year); @ 1.35% (2nd year) & @ 1.45% (3rd year)

Year

Current Rates

Current Instalment

Total Payment Per Year

REAL SAVINGS!!

1

1.25%

$2,766.01

$33,192.12

$22,515.60

2

1.35%

$2,803.75

$33,645.00

$22,062.72

3

1.45%

$2,841.81

$34,101.72

$21,606.00

4

$4,642.31

$55,707.72

$ –

5

5.50%

$4,642.31

$55,707.72

$ –

TOTAL ACTUAL SAVINGS FOR 3 YEARS

$66,184.32

But before you take the plunge, you should factor in the cost of refinancing.

You need to check if you are still within the “lock-in” period, i.e. would any penalty be imposed (usually 0.5% to 1% of the outstanding loan amount) if you terminate the existing housing loan early.

Final Tip:

You should check with your current bank to review your loan rates.

Most banks would allow customers to convert to the “new package”.

That way, you will enjoy the promotional interest rates without hassle and trouble.

It is possible to save money and improve your quality of life by refinancing your mortgage. Consult us via Lawyer Anywhere to refinance your mortgage.

RELATED ARTICLES

Categories
Articles

Singapore Lasting Power Of Attorney (LPA) Made Easy

#image_title

SINGAPORE LASTING POWER OF ATTORNEY (LPA) MADE EASY

When it comes to estate planning, understanding the various components that make up a comprehensive plan is crucial. These components typically include a Will, a Trust and a Lasting Power of Attorney (LPA). Each of these elements plays a vital role in ensuring that your wishes are followed, and your loved ones are protected.

A 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.

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.
  • However, 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 fulfilled 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 decide 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 must 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:-
    • 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.
    • 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.

7. 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

  •  they are over 21 years old;
  • not bankrupt, and
  • are willing to take on the role as your Attorney, which is a serious responsibility.

ISSUES TO CONSIDER

  • Who do you wish to be your Attorney?
  • Do you want to appoint more than 1 Attorney?
  • If your Attorney cannot act, do you want to appoint a replacement Attorney?
  • 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.

RELATED ARTICLES

Categories
Articles

Singapore Estate Planning Made Easy

#image_title

SINGAPORE ESTATE PLANNING MADE EASY

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 heartache and stress later.

If you need a Will or need to update your estate planning documents, 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, working with an experienced one is  strongly recommended. 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 to designate 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 decide 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 must file a court petition to gain access to and control of your assets and finances. However, 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 ensure that family members and friends know your medical treatment wishes before a healthcare crisis takes these decisions out of your hands.

An Advance Medical Directive (AMD),a Living Will, is a legal document you sign when you are  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 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 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 current, 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 also helps ensure that your wishes are carried out precisely as you desire.

 

FINAL TIP: Your estate plan must 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!

RELATED ARTICLES

Categories
Articles

Singapore Residential Property Stamp Duty Made Easy

#image_title

SINGAPORE RESIDENTIAL PROPERTY STAMP DUTY MADE EASY

Whenever there is a change of ownership of residential property in Singapore, the transaction must be taxed. 

The taxes that must be paid are as follows: 

(1) a Buyer’s Stamp Duty (BSD); and 

(2) Additional Buyer’s Stamp Duty, if applicable (ABSD).

What is BSD & How Much Is It?

BSD must be paid when transferring or buying Singapore real estate. BSD is based on the purchase price or market value (the higher amount).

BSD Rates (for transactions after 20 Feb 2018)

Purchase Price or Market Value of Property

BSD for Residential Property

First $180,000

1%

Next $180,000

2%

Next $640,000

3%

Remaining amount (above S$ 1 million)

4%

 

As you can see, the BSD is taxed at a different rate depending on how much the home cost to buy or how much it is worth on the market. So, people who can afford more expensive homes will pay a higher BSD, while people who buy cheaper houses will pay less.

Illustration

  • If we purchase a home worth $500,000, the BSD payable is $9,600.
  • If we purchase a home worth $2 million, the BSD payable is $64,600.

 

What Is ABSD & How Much Is It?

ABSD was part of a series of cooling measures implemented by the Monetary Authority of Singapore to limit speculative demand for residential properties in Singapore.

Since its introduction, the ABSD has undergone multiple revisions, and the Monetary Authority of Singapore has maintained that there are no intentions to relax property cooling measures.  The latest revisions were announced on 8 May 2022.

The buyer’s profile at the time of the purchase of the residential property will determine whether ABSD is payable, and if so, the amount of ABSD that must be paid.

ABSD must be paid in addition to the existing BSD by applicable buyers.

ABSD Rates (for transactions after 9 May 2022)

Buyer Profile

ABSD Rate 

SC–1st residential property

N.A.

SC–2nd residential property

17%

SC–3rd & subsequent residential property

25%

SPRs–1st residential property

5%

SPRs–2nd residential property

25%

SPRs–3rd & subsequent residential property

30%

Foreigners–any residential property

30%

Entities buying any residential property

35%

While the BSD is based on a percentage of the property’s selling price, the ABSD is fixed. The amount we must pay varies according to our nationality (whether we are Singaporeans, PRs, or foreigners) and the number of properties we own, as shown in the table.

Singaporeans must pay an ABSD of 17% when buying a second residential property.

Illustration

If we want to buy a second home that costs $2 million, we must pay:

BSD + ABSD = $64,600 + $340,000 = $404,600

 

Count of Residential Properties Owned

(A) Count from the Date of the Sale and Purchase Agreement

If the Option to Purchase has been exercised, it should be counted as one of the buyer’s properties as of the day he exercised the Option, even if the property has not yet been legally transferred to him.

This includes purchasing a unit from the developer before its completion if the Sale and Purchase Agreement has been executed.

Similarly, the property should not be regarded as one of the buyer’s properties if the new buyer has exercised his Option to Purchase.

 

(B) Partial / Joint Ownership

Ownership of any interest in a property is counted as part of a buyer’s total property holdings.

Illustration

  • John jointly owns a property with his wife – Count 1.
  • John owns a property with his brother, percentage ownership 30% – 70% – Count 2.
  • The number of properties owned by John is 2.

 

(C) Multiple Properties in a Single Transaction

Many residential properties can be purchased under one contract. However, each residential property will be counted as its own.

 

(D) HDB Shop with Living Quarters 

HDB shops with living quarters or shophouses with residential use will be included as a residential property count.

 

(E) Residential Properties Not in Singapore 

All residential properties not located in Singapore will not be included in the count of residential properties owned.

 

When Must BSD & ABSD Be Paid?

If the BSD applies to you, the ABSD must be paid within 14 days from the exercise of the Option to Purchase or the date the Sale & Purchase Agreement is signed.

 

What About Inherited Properties?

IRAS has clarified that BSD and ABSD are not payable on properties acquired by inheritance. However, such properties are included in the property count if further residential property purchases are made.

We offer video consultation via Lawyer Anywhere so that you can get the help you need. We can walk you through the process and answer any questions you may have. Contact us today to get started!

RELATED ARTICLES

Categories
True Files

Near Bankruptcy To Financial Freedom – A Success Story

bankruptcy
#image_title

NEAR BANKRUPTCY TO FINANCIAL FREEDOM – A SUCCESS STORY

THE BACKGROUND

The client runs a small family business importing and exporting goods from the neighbouring ASEAN countries and has been doing it for 35 years. Being old school, he runs his business based on relationships and personal ties. He has used the same bank for all his financial needs over the last 45 years. Conservative in his borrowing, he has one commercial loan secured by a mortgage over his shop house; and a renovation loan (surprisingly, this was in the form of an overdraft facility) secured by his home.

THE PROBLEM

During the economic slowdown, his business took a hit, and cash flow became a problem. The client started to miss loan repayment instalments which amounted to $15,000 per month, paying them intermittently whenever he could. Each month he struggled to raise the funds required to pay the loan instalments which were overdue. Snowballing default interest became an insurmountable burden, overshadowing even his anxiety over his failing business.

WHY HE CAME TO SEE US

By the time he came to see us, he had received a letter of demand from his bank. They had threatened to foreclose on both loans. In addition, the bank’s employee who had served as his relationship manager over the last twenty years had recently left the bank. The new relationship manager taking over his account was not sympathetic – “new brooms sweeps client,” as the saying goes – the new manager’s prevailing concern was to reduce the bank’s exposure in a recession.

Having been backed into a corner and feeling overwhelmed, the client came to see us, not expecting any more in terms of legal services than to help him “buy” some time with the bank. Yet, at the same time, he was desperately looking for ways to raise the funds to stave off the repossession of his family home.

WHAT WE ACHIEVED

A quick investigation of our client’s borrowing history and current property valuations showed that –

  1. his residential property is valued at $2.3 million, and his shop house at $1.1 million (current valuations).
  2. that the client’s total debt to the bank is $900k, a mere fraction of the total worth of the mortgaged properties – our client was over-securitized!

We called our bankers, and within a few days, they offered to refinance his loan by giving him a NEW term loan secured by his residential property only.

As residential term loans bear much lower interest rates than an overdraft loan, the client’s liability to his new bankers was now reduced to a manageable $2,500 per month.

Our client was so relieved and heartened by his change of status that he could now focus his attention on his business. To help him ride out the recession, he was able to sub-let his shophouse for $7,000 per month.

As a result, from the brink of a bankruptcy action, our client now enjoys a fixed monthly income of $4,500!

Refinancing will help you reduce your monthly repayments and improve your quality of life. Speak to us over video consultation via Lawyer Anywhere for advice on refinancing your housing loan today!

RELATED ARTICLES

Join our newsletter

Be first to get legal tips, articles and updates.

Ⓒ 2021 - All Rights Are Reserved