Powers of attorney - crossing borders

The rules of private international law (PIL) are intended to determine which country’s law should apply if there are cross-border factors. For example, a UK person may make an LPA in anticipation of mental incapacity, owning property, bank accounts, or stocks and shares not only in the UK but also in other countries.

PIL then covers

  • Which Courts have jurisdiction to decide if there is a dispute
  • Which State’s law will be applied in that Court
  • Which Courts in other countries will recognise and enforce the decisions reached on a dispute.

The Hague Convention XXXV of 2000 deals with the International Protection of Adults. It came into force on 1 January 2009, although it has not been ratified by many countries (France, Germany and Scotland have, but not England!). However, our Mental Capacity Act which governs LPAs does have much the same effect.

So, if mental capacity declines, will an English LPA be recognised if produced by the Attorney to sell a property in France, or operate a bank account in Jersey or Switzerland, or sell shares listed on the new York Stock Exchange? At a practical level my bet is that there would be trouble convincing a Notaire in rural France, or a company registrar in the USA, but you might be lucky with a branch of a UK bank in Jersey.

If you fail to convince the overseas party to recognise your LPA, what do you do? Well, in practice you might try arguing with the help of a fluent translator, having researched and quoted the rules of PIL which apply to that asset in that country. If you still fail and are getting desperate you may have to go to Court, or wait until the owner of the asset dies and their Executors can gain control.

But at what cost in terms of delay and money?

Whilst every case needs to be considered on its facts, the best thing may be to anticipate and forestall the problem by making an LPA (or rather the local equivalent) in local form in each country where assets are held. While some people do get round to making a local Will to dispose of property outside the UK to simplify the local probate process, very few seem to consider making a local LPA as they grow older. The question then becomes one of timing to make a local LPA, dependent on family circumstances.

But don’t assume that just because The Hague Convention XXXV has recognised the problem, you can get away with using an English LPA.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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