You Need a Power of Attorney in Singapore Because Someone Should be There When You Can’t
A Power of Attorney is executed by a person who wants to authorize someone to act on their behalf. The creator of the POA is called the “Donor” while the one receiving the authority is called “Donee.” The power given by the Donor may be for personal, legal, or business matters. For instance, when the Donor has to stay overseas for a long time or if they have to go to prison. Actually, you generally need a Power of Attorney if you want to be prepared in case something happens to you.
If you have plans of moving abroad to either work or retire there, then you need to consider getting advice. Ask about what could happen to any assets you have abroad in case you lose mental capacity. Planning ahead should always be done because no one really knows what could happen in the future. In all of the circumstances where foreign jurisdiction law or advice is needed, the document should be legally executed.
The mental capacity test is different in all varieties of a foreign jurisdiction. Their approaches are not the same when it comes to defining mental capacity, as well as different forms of representation. These representations can be used as an EPA or LPA. In some instances, these are called durable or continuing power of attorney in some jurisdictions. These powers are revocable marriage, divorce or incapacity so a piece of advice from a specialist should always be considered because of the jurisdiction.
It Does and Does Not Control Your Affairs Right Now
Both since you can get a POA immediately, and that is exactly what it is – the effectivity starts when you sign it. There is also a “springing” Power of Attorney, which the effectiveness “springs” when a certain event happens. Normally, this is when you become mentally incapacitated and unable to make your own decisions anymore. When a springing POA is drafted, they are normally made to spring into effect once you are incapable already. You are losing capacity if declared incapacitated by a doctor, the court, or you disappear for a certain period of time.
Make the POA Durable
The kind of POA you pick is crucial because it will dictate when the authority will be effective, and when it ends. For instance, a non-durable POA automatically gets revoked once you lose mental capacity. While a durable POA is still effective even if incapacitated, it gives clarity if you unexpectedly cannot handle your finances.
If the POA is not durable, the court might appoint someone to act on your behalf who is usually a guardian or conservator. This may hinder the firm from servicing your account because it can be confusing. Once there is court involvement, you might not be able to have a say in who they choose to make decisions. A durable POA could mitigate the risk, and make sure the important people you know are aware of it.
In case you do not want the POA to be effective right away once you sign it, you can create a springing POA.
Choose the Right Donee
The Donee you choose must be someone you can trust. Pick a Donee whom you are sure will keep in mind your best interests. You want it to be someone who will not take advantage of the power you give them. They should keep all the transaction records accurately, and update you regularly. If you are unable to review the reports, ask your Donee to give the report to a third party. The Donee does not have a legal liability except when there is any intentional misconduct. Normally, Donees do this for free. If you think that the Donee is abusing power, or is up to someone illegal, take it to law enforcement.
Periodically Check in with Your Financial Institution
Contact your financial institution to monitor that there are no unauthorized parties trying to access your account. In addition, ask about the policies of the company in case someone tries to. This way, they can inform you once it has received the POA, guardianship, and/or other documents about your account.
There are regulatory obligations from financial institutions regarding your account’s privacy and information, and they are protective of this. Normally, companies are concerned about fraudulent acts and financial exploitation of vulnerable clients like senior investors. This explains why they normally ask for an original copy of the POA affixed with your signature.
In case they want the original POA, they might ask you to give an affidavit that you cannot give the original copy. This way, they can accept a certified original copy. Therefore, it is wise to have more than one signed-original copy of your POA.
Why You Need it
Assigning a Power of Attorney might be a practical mean of managing and handling your resources, finances, and estate. It can be essential in case you have short-term illnesses, or you are unable to handle any important matters because of other reasons. When this happens, your attorney will be the one responsible for handling any pending affairs you have. During the times when you are rendered mentally incapable, your attorney is authorized to handle financial, legal or estate decisions for you. This is why it is a good decision to have a Power of Attorney appointed to someone you choose. To avoid choosing the wrong person as your Donee, you must hire a lawyer in Singapore. A lawyer will ensure the person’s credibility and make sure your POA gets correctly notarized.
Under the law, your donee must take into account any expenditure and management of assets and capital you have. All major decisions need the approval of the grantor and need his/ her final say. If the Donee abuses his/ her power or is unable to perform the responsibilities that were assigned, he/ she might face extensive litigation. Therefore, in case the appointed Donee turns out to have fraudulent intentions, you can use the POA as evidence in the court.
While executing the POA, only choose agents that you completely trust since you have complete freedom in assigning your POA. You have the option to appoint 1 or more Donees. In fact, you can even appoint successive or alternate Donees. You can tell your Donees to decide together, jointly, or they can be commanded to act independently if one is unavailable.
You cannot predict life, and there are a lot of unforeseeable circumstances. To avoid worrying about it and secure your family assets, taking precautionary measures are necessary. Appointing a Donee gives you an assurance that in case of any event that will make you mentally incapacitated. Whether in the near or late future, you have a trusted person to make decisions for you.
Granting a POA in Singapore
You have 2 choices:
- You sign the document at the Spanish Embassy before a Consul.
- Complete all of the registration steps and sign the document at a local notary public.
It is normally easier to go to the Embassy, but they only issue documents in Spanish. Therefore, an interpreter is necessary. For appointment booking at the Embassy, you have to submit these documents and information:
- Personal details (full name, contact number, address, marital status).
- Your ID’s copy (D.N.I., or N.I.E. and passport, if applicable).
- The last text you want to sign (minuta).
- The ID and credentials of the interpreter.
In case your text was not made bilingual, you can have it translated in advance to make sure you understand it. Moreover, you can get legal advice if you need any amendments or clarifications.
The Embassy could take a couple of days before granting an appointment. So, and you need to tell them about any changes made at least 3 days in advance. The process at the Embassy normally lasts 45 to 60 minutes. You will receive the official document’s authorized copy with the Consul’s signature and Embassy stamp.
There is a similar process if you are executing a POA, a POA revocation, an affidavit or declaration.
If the POA you are granting is on a company’s behalf, call the Embassy, and they will tell you about any additional requirements.
Local Notary Public
This is a little more complex but here are your options if you want to sign a bilingual document:
- Book an appointment with a local notary public by contacting them.
- After signing the document at the local notary public, have it authenticated by the Singapore Academy of Law (SAL).
- Go to the Ministry of Foreign Affairs (MFA) and have the SAL authentication and your document verified.
- Bring all of those to the Embassy to get a stamp.
Fiduciary Responsibility of the POA
There is a misconception that the Donee can take money from you and keep it for themselves. Although, under the laws, the Donee is has a “fiduciary responsibility.” Therefore, they should only act accordingly, and they are blocked from using your money for their own benefit.
Having 2 or more people as your Donee prevents inter-family jealousy. Make sure that a dishonest Donee cannot do anything against your will. Although, it comes with the disadvantage of needing all Donees to agree on all decisions. This will significantly slow them down from accessing funds and decide on other legal actions.
Most of the time, parents authorize a child and other successor Donees mentioned in the document. In case the Donee/child refuses or cannot act on their behalf, there is already a successor Donee. Usually, it is not wise to let the named Donee choose their successor because they might choose someone you do not approve of.
You Need a Backup Plan
Aside from naming a successor Donee, in case the first one cannot continue the duties, you can also name a POA monitor. This is someone who makes sure that the POA is carrying out the responsibilities properly. The agreement of your POA might need your Donee to give copies to the monitor of account statements, trade confirmations, and withdrawal accountings.
You might also want to put a provision requiring trusted friends or family members to sign off on the major decisions in your accounts. These are significant changes in asset allocation, beneficiaries, or making a huge withdrawal. There are those who do not fall under within any parameter of any risk profile given to your advisor or broker.
Even if a POA can give clarity on the management of your affairs while you are still alive, it is not a replacement for an estate plan. Arrangements of the POA ends when you or your Donee dies. This is why it is always advisable to consider what will happen to your finances and assets when you die.
There are times when the risk of having a POA outweigh the benefits of having one. If the Donee oversteps the bounds assigned to them, he or she could wreak havoc to the Donor. There are times when the Donor gives a couple of important duties to the Donee because the designation is too broad. The Donor might let the Donee sell his or her property, run a business, modify trusts, change the designation of beneficiaries. They could even perform other actions which could be consequential in the long run.
The Donor might face difficulty in holding the Donee accountable for any wrongdoing after giving very broad powers. In addition, there is very minimal oversight in this situation because there’s a binding contract which the court cannot overpower. However, the POA has its limitations. It ends when the Donor dies. The Donee can no longer manage financial affairs after the principal has passed. Moreover, it might not have broad coverage when a person becomes completely incapacitated, and there is a need for guardianship.
You should also not name someone who has their financial problems or has other traits that make him unfit to become a Donee.
There are a lot of reasons why you need a Power of Attorney and other important information. Keep in mind that getting a POA is very beneficial to you.