As the ageing population of Singapore increases, more and more older adults opt to create a lasting power of attorney and give it to people, they trust the most. But, the question is can a Lasting power attorney really prevent the elderly from being scammed? How can making a lasting power of attorney protect one’s assets?
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document that allows a person, particularly the elderly, to appoint someone to act or make decisions on his or her behalf. The requirements to become a donor, on who had the Lasting Power of Attorney created, to be 21 years old or above. And the said donor must be mentally capable when the Lasting Power of Attorney is created. And he or she must do so voluntarily. No one can force someone to create a Lasting Power of attorney. It must be voluntary and of one’s own accord. The person appointed by the donor will make decisions on behalf of the donor, in the event that he or she will lack mental capacity in the future.
It’s inevitable for the elderly to lose mental capacity one day. So, appointing a responsible and trustworthy person to handle his or her assets when illnesses such as dementia strikes protect the elderly from financial abuse. This scenario is especially true in cases where no estate planning has been done such as making a trust or a will.
Who are the people involved in the Lasting Power of Attorney?
- Donor – this is the person who had the Lasting Power of Attorney drawn up.
- Donee or replacement donee – this refers to the person appointed by the donor to handle, act and make decisions on his or her behalf. He or she takes control once the donor has lost the ability to make decisions for himself or herself. Or, in simple terms when the donor lacks the mental capacity to make sound decisions.
- Name the person to be notified – this can optional to the donor.
- Certificate Issuer – this is the witness to the Donor’s execution of the Lasting Power of Attorney. He or she can be either of the following:
- an accredited medical practitioner such as a doctor
- A practising lawyer
- A psychiatrist
How Can a Lasting Power of Attorney Prevent Scamming?
Elders are susceptible to fraud and manipulation from others. Take a look at the highly-publicised case of Madam Chung Khin Chun, 87, versus the Chinese tourist guide Yang Yin. The Chinese former tourist guide managed to fool and dupe the 87-year-old woman. And almost get away with taking $ 1.1 million from Madam Chung.
Lasting power of attorney would grant authority to someone trustworthy to manage an elderly’s property. The appointed donee must have his or her means of living and of almost equal status to prevent greed and fraud from happening. In the case of Madam Chung, had she appointed her niece Madam Hedy Mok as her donee, Yang Yin wouldn’t be able to sway and fool the woman. This is because a donee decides on the following:
- Where the donor should live
- Who the donor should live with
- Day to day decisions concerning the personal care
- Social activities to take part in
- Handling of personal correspondences
- Who to be in contact with
- Donor’s properties (buying & selling, etc.)
- Handling bank accounts
- Receiving income
- Taking care of Tax matters
- Paying obligations of the donor
- Purchasing Goods
A trusted relative who cares for the elderly like a donor’s child, grandchild, niece or nephew, even a sibling will ensure that the welfare of the donor is put first. This can prevent scammers who have gotten close to the elderly from getting anything because the donor’s life is shielded and protected by the donee.
Where to get LPA Forms?
The Office of the Public Guardians is the government agency assigned to act as the registrar and the maintenance of a register of Lasting Power of Attorney. LPA forms can be downloaded from their site.
For wealth management purposes, it is better to consult family lawyers and one’s Trust company before choosing to enact a Lasting Power of Attorney.
A Lasting Power of Attorney will prevent anyone from taking advantage of the elderly. It ensures that the elder person’s assets are not taken from him or her. And he or she is not placed into destitute because of others ill-intentions.
Learn more about estate planning and wealth management through the book “The Rockwills Guide to Succession and Trusts in Wealth Management” by Chiwi Lee. Buy the book by clicking the link: http://www.rockwills.com.sg/book_purchase.aspx.