Reviewed by James Badcock
If your parent or elder relative has already established Lasting Powers of Attorney (LPA), congratulations – they’ve ticked off a major item on the ‘to-do’ list for getting older, and given you one less thing to worry about.
Without them, if they were to suddenly become unable to make decisions for themselves due to illness or mental incapacity, your family could face legal delays and complications when trying to access accounts, pay bills, or make crucial decisions on their behalf.
However, while LPAs are recognised across the UK nations, their recognition varies significantly when it comes to foreign jurisdictions. This can lead to complicated and stressful legal battles if your parent has assets your family need to access or manage abroad. Situations like this can take a heavy financial and emotional toll especially if you’re trying to care for your parent at the same time.
If your parent has assets like a holiday home or a bank account in another country, it’s important to understand how their LPA might – or might not – be recognised.
Here we explain what you need to know and the steps you should take to avoid potential complications down the road.
A quick refresher on LPAs
An LPA is a legal document that gives someone (the “attorney”) the authority to make decisions on behalf of another person (the “donor”).
There are two types of LPA in the UK:
- Health and Welfare LPA: Covers decisions about medical treatment, living arrangements, and personal care.
- Property and Financial Affairs LPA: Allows the attorney to manage financial matters, including accessing bank accounts, paying bills, and selling property.
This article concerns LPAs for Property and Financial Affairs, and assumes you are the named attorney. This information also applies to the recognition of Enduring Powers of Attorney, the equivalent document that could be put in place before October 2007.
Note: If you want to know more about LPAs and how to set them up, take a look here.
Why aren’t LPAs made in the UK recognised abroad?
One key reason for the lack of international recognition concerns something called The Hague Convention on the International Protection of Adults 2000. This is an international agreement that was designed to establish a standardised framework for recognising powers of attorney and court orders across different countries.
Within the UK, only Scotland has ratified (formally approved and adopted) the 2000 Hague Convention on the International Protection of Adults; England and Wales have not yet done so.
This means that LPAs created in Scotland are recognised in other countries that have ratified the convention (including Germany, France, and Spain) but those made in England and Wales might not be.
How can this cause problems?
When foreign institutions don’t recognise your parent’s LPA, it can create significant hurdles for you if you are the named attorney.
If your parent owns a holiday home in France or a bank account in Spain, for example, you may need to go through complex legal procedures in those countries to gain the authority to manage or sell these assets.
This often involves hiring local lawyers, translating documents, and potentially seeking a court order, all of which can be time-consuming, frustrating and expensive.
Are there plans to ratify the Hague Convention in England and Wales?
At present, the UK government has not indicated any immediate plans to ratify The Hague Convention on the International Protection of Adults 2000 in England and Wales.
Although ratification would simplify cross-border recognition of LPAs made in these jurisdictions, and ease the legal processes for managing foreign assets, particularly for those in countries that have adopted the convention, it remains a topic of debate.
What can families do in the meantime?
Fortunately, there are a few steps you can take to prepare for or minimise the issues that arise when foreign assets are involved:
- Seek legal advice in each country early: If your parent has significant assets in another country, it’s worth consulting with a legal expert in that jurisdiction. They can advise on the local requirements and whether a separate power of attorney is needed to manage their foreign assets should they become unable to make decisions for themselves.
- Consider creating a local Power of Attorney: In some cases, it may be easier to create a power of attorney that is valid in the country where the assets are held. This would give the attorney the legal authority to act without needing to navigate complicated international recognition processes.
- Prepare documentation: Having all relevant documents – such as property deeds, bank statements, or share certificates – properly translated and readily available – can help streamline any legal processes that may arise.
- Consider a Will: In addition to an LPA, ensure your parent’s will is up-to-date, especially when foreign assets are involved. Some countries have different inheritance laws that may affect how foreign assets are distributed after death.
In summary
Lasting Powers of Attorney are crucial for managing the financial affairs of ageing parents, but their effectiveness can be severely limited when foreign assets are involved.
Understanding the complexities of cross-border recognition and being prepared for potential legal challenges is vital for anyone whose parents or relatives own property or hold funds overseas.
Early planning, seeking appropriate legal advice, and potentially creating separate powers of attorney in relevant countries can help avoid unnecessary stress and expenses down the line.
Common questions
- Do I need to create a new LPA for each country where my parent has assets?
It depends on the laws of the country in question. In some cases, a local power of attorney might be required, while in others, the UK LPA may be recognised with additional legal steps. Always consult with a legal expert in that country.
- What happens if my parent becomes incapacitated before we’ve sorted out their foreign assets?
If no LPA is recognised in the foreign jurisdiction, you may need to apply for a local court order to gain control of their assets, which can be a lengthy and expensive process.
- Does Brexit affect the recognition of LPAs in Europe?
Brexit has had an impact on various legal frameworks, and while it hasn’t directly affected LPA recognition, it’s another reason why seeking local legal advice in any European country where your parent holds assets is a good idea, sooner versus later.
Disclaimer: The information provided in this article is for informational purposes only and is not intended as legal advice. Laws and regulations regarding Lasting Powers of Attorney in the United Kingdom may vary over time and across jurisdictions. It is recommended that readers consult with a qualified legal professional and check the official government website to obtain up-to-date advice tailored to their specific situation.
