Types of Power of Attorney
A Power of Attorney (PoA) is a legally binding document, which allows an individual to give another person the power under law to act on their behalf.
The donor is the person who gives the power, and the donee is the individual who received that power.
Who might need a Power of Attorney?
For individuals who spend a lot of time abroad, or who for some reason cannot personally manage their own affairs in Singapore (such as when renting, selling or buying real estate), a Power of Attorney can be a very useful instrument.
The main types of Power of Attorney
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General Power of Attorney
As the name suggests, a General Power of Attorney gives power to someone to act on the donor’s behalf in all situations. This might include anything from opening safety deposit boxes, to entering into contracts on someone’s behalf, collecting debts, filing tax returns or selling/buying/renting property. Sometimes, however, a limit may be placed on these powers.
A General POA can be revoked if:
- The donor revokes it
- The donor becomes incapacitated
- A certain event listed in the POA document occurs
- The donor dies
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Specific Power of Attorney / Non-Durable Power of Attorney
This type of POA is used if a donor wants to assign limited or specific powers to a donee. Then the donee can only act in a particular way, on a particular matter.
As is the case with a General POA, if one of the following occurs, the POA can be revoked if:
- The donor revokes the POA
- The donor becomes incapacitated
- An event specified in the POA document happens
- The donor dies
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Housing and Development Board Power of Attorney
HDB POAs are used if a house buyer isn’t able to collect their keys, for example, or can’t sign a sale or lease agreement or any other contractual document such as deed of assignment, lease-in-escrow, mortgage-in-escrow or option to purchase.
Perhaps the buyer lives abroad and can’t sign the document; they can then use an HDB POA which gives power to someone nominated by the person to execute the document, or to sell or refund money to the CPF Board.
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Conditional / Springing Power of Attorney
As the name suggests, this type of POA only comes into force when a certain events occurs, or a specific condition is satisfied. It could be that a donor travelling overseas triggers the Conditional POA, and during their absence the donee acts on their behalf. If the donor then returns to their home country, the POA ceases to apply, and the donee can no longer act for the donor, unless they leave the country again.
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Lasting Power of Attorney (LPA)
If a donor becomes incapacitated mentally for the long-term, then an LPA can be used to give someone continuing power to maintain the donor’s affairs. The LPA lets the donee make decision on the donor’s finances, welfare and property. Note that Lasting Powers of Attorney are covered in the Mental Capacity Act.
The benefits of an LPA are that the donor’s family no longer have to worry about their loved one’s affairs, and their suffering may be alleviated, as can their costs. If they had to apply for a court order, then the legal fees may total between $5,000 and $10,000. An additional benefit is that they help to prevent disputes within families, as they make clear who should make decisions for the donor going forward.
An LPA form must be certified in order for it to be valid, and to ensure the donor is aware of how the LPA works and how it will affect them. Having it certified means fraud, duress or undue influence is also prevented. A practicing lawyer can certify an LPA, as can an accredited medical doctor or psychiatrist.
Who can create a POA?
It is safest to get a lawyer to create a POA, because the process requires a good legal knowledge of the law and the procedure. A lawyer will advise you, help you draft the POA, and ensure your questions or concerns are answered before you sign the document.
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