When an individual gives another person the legal power to act on their behalf, this is known as a Power of Attorney (POA). It is a legally binding document.
- The person giving the power is known as the donor, and
- The recipient of the power is called the donee.
Who needs a Power of Attorney?
A POA is a useful legal instrument for people who spend a lot of time outside of Singapore, perhaps abroad, for business or other reasons. Such people cannot personally manage their own affairs in the country, for example, when buying, selling or renting real estate.
Five kinds of Power of Attorney
1. General Power of Attorney
A General POA gives power to the donee to act on the donor’s behalf in all situations. However, it sometimes limits the donee’s powers too. For example, it gives the donee the ability to sell/rent/buy property, open safety deposit boxes; enter into contracts on the donor’s behalf, collect debts; and file tax returns, amongst other things.
The following situations will revoke the General POA:
- Revocation by the donor;
- Incapacitation of the donor;
- Death of the donor;
- A specific event stated in the POA document happens.
2. Specific Power of Attorney / Non-Durable Power of Attorney
If a donor wants to give specific or limited powers to the donee, they will use a Specific POA or Non-Durable POA. The donee then only has the legal authority to act in specific ways. As with the General POA, this type of POA will be revoked if:
- The donor revokes the POA themselves;
- The donor dies;
- The donor becomes incapacitated;
- A specific event listed in the POA happens.
3. Housing and Development Board (HDB) POA
This is the form of POA most commonly seen in Singapore. An HDB POA is useful when a house buyer can’t collect their keys, for example, or they can’t legally sign a document such as a Sale and Lease Agreement, Option to Purchase, Mortgage-in-Escrow, Lease-in-Escrow or Deed of Assignment.
If the buyer lives abroad and can’t sign one of these documents, they will use an HDB POA, which states the nominated person’s / lawyer’s authority to execute the document, sell, or refund money to the CPF Board.
4. Lasting Power of Attorney (LPA)
An LPA gives the donee a continuing power to maintain the donor’s affairs if the donor becomes incapacitated mentally. Then the donee can decide on matters such as finance, property and welfare for the donor. Note that the Mental Capacity Act applies to Lasting Powers of Attorney.
An LPA can help alleviate the stress that the donor’s family may suffer; it can also reduce costs to the family, for example, if they have to apply for a court order, which may cost between $5,000 and $10,000 in legal fees. Family disputes are also prevented as it is clear who should make decisions on behalf of the donor.
To ensure the donor understands the function and consequences of the LPA, it is compulsory to have the form certified to make it valid. This also prevents coercion, fraud or undue influence. Certification of an LPA can be carried out by practising lawyers, medical doctors (accredited ones) or psychiatrists.
5. Conditional / Springing Power of Attorney
As you may have guessed, this type of POA only applies when a specific condition is met or a certain event happens. For instance, the donor travelling abroad may be the condition that activates a Conditional POA. Whilst they’re away, the donee acts on the donor’s behalf. But if the donor returns to the country, the donee no longer can act for them, as long as they remain in Singapore.
Can I create my own POA?
You should always ask an experienced lawyer to help create a POA, as they involve complex procedures and require good legal knowledge. A lawyer can advise you, draft the POA, and answer your questions before you come to sign the document.