Powers of Attorneys across borders (part 2)
Professionals within the Private Client sphere will no doubt be familiar with English Lasting Powers of Attorney (LPAs) and the importance of clients authorising one or more individuals to make decisions on their behalf in the event of incapacity. But what happens if the client makes an English LPA but also has a property in France? Or if the client is resident in the US and has made a ‘springing power of attorney’ under say, New York law, but also owns a stocks & shares portfolio here in the UK?
Assets situated in other jurisdictions
In the last edition of Looking Ahead, we explored whether foreign powers of attorney are recognised and can be enforced in the UK. Please read here.
In this second article, we consider whether English LPAs can be used by attorneys to manage assets situated in other jurisdictions.
Taking, for example, a client who has made an English LPA for financial decisions but in addition to English assets owns a property in Spain. Can the client’s attorneys use the English LPA in Spain if the client subsequently loses capacity and the property needs to be sold in order to fund the client’s care in the UK?
Will an English LPA be accepted abroad?
The Hague Convention XXXV on the International Protection of Adults came into force on 1 January 2009 and deals with issues of acceptance, jurisdiction and enforcement in the context of powers of attorney. However, whilst the UK is a signatory to the Convention, it is only ratified in respect of Scotland and so does not have effect in England and Wales. As such, there is no legal right of acceptance and enforcement of English LPAs in other countries which did ratify the Convention.
Whether or not an English LPA will be accepted in another jurisdiction therefore very much depends on the particular jurisdiction and the institution/authority in question. For example, what may be acceptable in Spain may be different to what is acceptable in the USA or India but moreover what might be acceptable to a French notary involved in the sale of a property may be different to what is acceptable to a French banking institution.
Additional steps may need to be taken
Many countries and institutions/authorities will recognise an English LPA made when the client was habitually resident in the UK but it is probable that additional steps will need to be taken before the LPA can actually be used.
For example, a certified copy of the LPA is unlikely to be sufficient; it may be that the document needs to be certified by a notary public and an apostille from the Foreign and Commonwealth Office may also be required. If the foreign jurisdiction is not English-speaking, a formal translation will likely also be necessary, along with a notarial certificate confirming the accuracy of the translation.
Some jurisdictions require that an application be made to Court so that the English LPA can be formally registered by an order of the Court in that jurisdiction thereby allowing the attorneys to act. Such applications may be time consuming in circumstances where decisions or actions need to be taken by attorneys promptly.
Finally, there are some jurisdictions which may not recognise the English LPA at all and instead it will be necessary to fall back on the local laws dealing with incapacitated individuals and their assets.
Take advice!
It is therefore important that clients who have assets abroad consider carefully (with the benefit of professional foreign advice) whether their English LPAs will be readily accepted in the foreign jurisdictions in question or whether it would be prudent for them to make local powers of attorney which can be easily relied upon in the event of incapacity.