Without an LPA – Finance management

In my last post, I wrote about the process of putting an LPA (lasting power of attorney) in place, so when there’s a need because of a loss of mental capacity, someone has been assigned to have the power of attorney to make decisions and have access to finances.

What happens when there isn’t an LPA?

The joint bank account solution has been used by some. In the event of an emergency or loss of mental competence, the joint holder can operate the account. Unfortunately this also means the ‘trusted’ loved one can empty the account for their own purposes instead, and ahead of time.

If there isn’t a joint bank account, I’m sure other methods such as the ATM card (and shared pin) or forged cheque signature have been used in a pinch. Again these methods can surreptitiously be used ahead of time! Still, we do need to trust someone in our time of need and we hope that someone will not betray our trust.

Sometimes the elderly person is brought to the bank by a relative to transfer all their funds to that relative. Singapore banks have been on the lookout for scams and will stop bank transfers from someone they suspect has diminished mental capacity.

There was a huge cheating case here in recent years where a chap used the LPA process to cheat a generous old lady of millions of dollars. He made himself the recipient of the LPA, had her declared to have dementia and then helped himself to her money, her art and her house.

Fortunately for the lady who was childless, her niece stepped in and had the resources and smarts to fight the case. It must be said though, the old lady is still very fond of the scoundrel who cheated her whom she considered an ‘adopted son’. She does have dementia and I suspect it was a tough court decision to determine which decisions were made with a sound mind and which were not. Some info on the case here.

I’ll share about medical decision-making without LPA in another post.

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