Lasting power of attorney (LPA).

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Being financially prepared is all well and good, but it will be difficult and time-consuming to execute any well-thought-out financial plan if a person did not make his lasting power of attorney (LPA).

The LPA is a legal document that allows a person who is at least 21 to voluntarily appoint one or more people (donees) to make decisions and act on their behalf if they lose mental capacity.

Donees can be appointed to take care of a person’s personal welfare and manage his property and other financial affairs.

There are two types of LPA forms. Form 1 grants donees general powers with basic restrictions and can be done online on the Office of the Public Guardian website.

The second form bestows donees customised and specific powers and needs to be drafted by a lawyer.

Ms Tan says an LPA prevents a person’s family from being caught in unnecessary, lengthy and costly court proceedings to apply for deputyship to manage his personal and financial affairs.

“An LPA can prevent families from being locked out of bank accounts, insurance proceeds and assets when they need them most”, she adds.

Lawyer Chong Yue-En from Bethel Chambers warned individuals to think carefully who they want to appoint as their donees because there are no checks and balances on them; they do not have to report to anybody on how they use the money

“There are donees who run away with the money or spend it on themselves”, Mr Chong adds.

He advises everyone to also do an advanced care plan when they make their LPAs.

These plans spell out how the person wants to be medically treated and cared if he loses mental capacity.