A Lasting Power of Attorney Can Guard Against Financial Abuse

None of us wants to think we might be rendered mentally incapable one day, yet sadly the risk is there, so drawing up a Lasting Power of Attorney (LPA) is essential.

- Chor Khieng Yuit

This simple document can protect people from being exploited financially, and go a long way towards reducing the anguish and stress for loved ones dealing with the stricken person.

An LPA allows a donor who is at least 21 years old to voluntarily appoint up to two donees to make decisions and act on his or her behalf.

Donees can be appointed to act in the two broad areas of personal welfare and property and other matters.

Personal welfare includes the donor's daily care and living arrangements, while property and other matters include managing the donor's bank accounts, investments and tax matters.

Mr Chong Yue-En, global chair of the mental capacity special interest group at the Society of Trust and Estate Practitioners, said the LPA includes penalties if a donee abuses—including financially the person being cared for.

Singapore, Britain, Australia, New Zealand and Hong Kong have LPA frameworks in place, said lawyer Lim Fung Peen.

Mr Lim, who heads the private wealth and family practice group at Yuen Law, wrote a book in 2019 on the importance of having an LPA and how to set one up.

The Ministry of Social and Family Development said 233,000 Singapore citizens aged 50 and over had registered LPAs as at Sept 30, 2024, a 32 per cent jump from the 177,000 at the end of June 2023.

LPAs for this age cohort are on track to exceed the 240,000 target by the end of 2025.

An LPA allows for checks and balances against financial abuse, but only if it is set up early, before a crisis hits, noted Ms Chandrima Das, chief executive and co-founder of Teleskop, which provides digital vault services for information on an individual's assets like property, wine and art.