A power of attorney (POA) is a document that allows someone to give authority to another person to carry out certain acts on their behalf. The person who creates the POA is known as the “donor”, and the person who is authorised to act on their behalf is known as the “donee”. A POA is a good insurance to have in place in the event you are unable to make and/or execute important decisions relating to your welfare and property.
Understandably, a donor may be apprehensive about handing over the management of their financial and personal decisions to another person. However, depending on the type of POA used, the document does not always automatically transfer authorisation to the donee to carry out acts on the donor’s behalf. There are also laws in place aimed to ensure people making POAs are protected from potential abuse, as it is acknowledged that the people who rely on POAs are often the more vulnerable members of society.
In Singapore, there are 5 different types of POA, with each one being used for a different purpose. It is crucial to understand how each document operates before considering which one is best suited to your circumstances.
General Power of Attorney (GPA)
As the name suggests, a GPA allows the donee to act for the donor in all circumstances unless otherwise stated in the document. It is up to the donor to decide what they want provided for in the GPA and what they want excluded. The powers could be anything from accessing bank accounts to purchasing and selling the donor’s property.
The GPA will generally come into effect once it is duly signed and executed. Therefore, the donor needs to understand by giving this type of POA; they are giving general authorisation to their donee to act on their behalf.
This type of POA will usually remain valid until any one of the following events occur:
- The donor dies.
- The donor loses mental capacity.
- The donor revokes the POA.
- A specified event in the POA takes place, resulting in the document becoming invalid.
Specific Power of Attorney (SPA)
This type of POA authorises the donee to act only in relation to specific matters, so they will not have any power outside of what has been specified in the document. This is usually preferred if there are certain things the donor requires help with, so they are happy to provide authorisation to their donee to assist with this wherever necessary.
The donor should be careful to draft the terms of the SPA as clearly as possible, so the donee knows what they are permitted to do.
An SPA will usually remain valid until any one of the following events occur:
- The donor dies.
- The donor loses mental capacity.
- The donor revokes the POA.
- A specified event in the POA takes place, resulting in the document becoming invalid.
Lasting Power of Attorney (LPA)
This document authorises the donee to manage the donor’s welfare and finances if the donor loses mental capacity. Without an LPA in place, it can be challenging for the donor’s affairs to be managed once they lose capacity. The person (or persons) appointed in an LPA will often be someone with whom the donor has a close relationship and can trust to act in their best interests if the time comes.
A person cannot execute an LPA unless they are at least 21 years old. The LPA will appoint at least one donee to make decisions regarding the donor’s health and property, plus specific provisions can be made for the donor’s wishes.
The donor must understand the effect of the Lasting Power of Attorney they are making. To this end, a certificate issuer (such as a lawyer or psychiatrist) must certify the relevant forms to confirm this has been explained to them. This helps to protect the donor from being pressured into preparing the document, which is especially important in situations where they may already be vulnerable.
The LPA will not come into effect unless and until the donor has lost their mental capacity to the extent, they are no longer able to carry out the acts provided for in the document. The loss of capacity must be assessed and certified by a medical practitioner before the donee can use the POA. The donor’s capacity may also improve, in which case they can return to making their own decisions, and the donee’s powers will be revoked.
An LPA will usually remain valid until any one of the following occurs:
- The donor dies.
- The donor revokes the LPA.
HDB (Housing and Development Board) Power of Attorney
This is the most common type of POA in Singapore. It allows a homebuyer or seller to appoint another person to sign the necessary documents and collect the keys regarding his property purchase or sale. There may be situations where a person who wants to buy, sell, or rent their HDB property cannot keep attending the relevant location in Singapore to execute the documents, so it is reasonable for them to authorise somebody else to do it.
The HDB POA will usually allow the donee to sign documents, including the sales agreement, lease agreement, deed of assignment, and mortgage-in-escrow, amongst others.
There are 3 main types of HDB POA:
(1) Purchase, Subletting, and General Management
This allows the donee to make decisions relating to the purchase and the letting or subletting of an HDB property. It also provides them with authorisation to deal with matters relating to the maintenance and general management of the flat.
(2) Sale, Subletting, and General Management
This allows the donee to make decisions relating to the sale and the letting or subletting of an HDB property. It also provides them with authorisation to deal with matters relating to the maintenance and general management of the flat, as above.
(3) Subletting and General Management
This allows the donee to make decisions relating solely to the letting or subletting of an HDB property. As with the above documents, they are also authorised to deal with matters relating to the maintenance and general management of the flat.
For this type of POA to be valid, a lawyer must be instructed to draw up the document. This is because the POA will eventually give effect to important legal transactions, so it needs to be executed properly. The POA must specify precisely what the donee has the authority to do. If the donor is undertaking a property transaction with another person, they must have their own HDB POA prepared.
The HDB POA will usually remain valid until any one of the following events occur:
- The donor revokes it.
- After the expiration of 6 years from the date of execution.
Summary
The 5 types of Power of Attorney in Singapore are designed to deal with a variety of situations. When considering making a POA, it is vital to ensure you have a complete understanding of your options and the implications of executing the different types of documents.
Whilst you may feel hesitant to draw up a POA, it is essential to remember that the law understands the importance of individual autonomy and will not allow these powers to be abused, whether by the chosen donee or any other party. Having a POA in place will provide peace of mind not just for yourself but also for your loved ones.
It is advisable to seek the assistance of a lawyer who can discuss your circumstances with you, advise you on the appropriate document to draw up and prepare the POA for you. Aside from the HDB POA, it is not legally required that the document be prepared by a lawyer. However, doing it this way will ensure that the POA can be implemented without issues.
