Lasting Power of Attorney (LPA)
The LPA gives you the flexibility to make plans for your own mental incapacity, and allows you to choose the person who is able to make your financial decisions when you can no longer do that for yourself. If you don’t plan ahead and lose mental capacity at some stage, your bank account will be frozen by the bank, and strangers could end up making financial decisions for you. When a person loses his mental capacity and does not have a LPA, an application may be made to the Court for someone to be appointed as his Deputy. The appointment of a Deputy can be a complicated affair involving time and legal expenses.
Making a LPA ensures that matters that are important to you are carried out and dealt with as you would want them to be.
The LPA takes effect when the Donor loses his mental capacity. The LPA must be registered with the Office of Public Guardian (“OPG”) for it to be valid.
There are 2 types of Donees that are appointed in the LPA — (1) Personal Welfare Donee, and (2) Property & Affairs Donee. The Personal Welfare Donee must be an individual who is at least 21 years and this is the care giver role. Precepts Trustee Ltd can take on the role of the appointed Property & Affairs donee. The responsibilities and decisions the trustee takes on includes the following:
- Dealing with property – buying, selling, renting & mortgaging property
- Opening, closing & operating bank accounts
- Receiving dividends, income, or other financial entitlements on behalf of the donor
- Handling tax matters
- Paying the rent, mortgage repayments & household expenses
- Investing the donor’s savings
- Purchasing a vehicle or other equipment that donor needs
You could consider doing your LPA along with the creation of a standby trust. Ask your REP on this.