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STEP’s Global Representative Power campaign – A new era in cross-border asset protection

Managing cross-border assets like property and businesses has always been a common yet complex challenge - which multiplies when you throw mental capacity into the mix. That’s why the Society of Trust and Estate Practitioners (STEP) has launched its Global Representative Power (GRP) campaign to create the world’s first global power of attorney.

The STEP GRP serves as a universally recognised and portable template for a lasting power of attorney (LPA). It’s the first initiative from a professional body to harmonise the legal disparities in mental capacity laws across different countries, recognising the individuals and families grappling with cross-border asset management.

It’s been a lot of work to get this groundbreaking campaign over the line – but if the end result is a globally recognised power of attorney standard, then it’s well worth the effort. As the incoming worldwide STEP chair, I’ve seen firsthand the growing mental capacity crisis we’re facing in the UK and beyond – and what needs to be done to help fix the legalities around it.

The facts around mental capacity

STEP’s new report, Loss of Mental Capacity: A Global Perspective, holds some damning statistics on the prevalence of mental incapacity. The survey received close to 800 responses from professionals across 44 countries, revealing a concerning rise in mental capacity issues and financial abuse.

83% of the respondents predicted demand for capacity-related advice to increase in the next five years, while the majority of respondents (57%) said they’d observed suspected financial abuse. Paired with a 2017 study from the World Health Organisation (WHO), which found that dementia cases are set to triple by 2050, the need for the elderly to protect their assets is increasingly growing.

Of course, mental capacity doesn’t just cover old age. It can mean a young adult having a trusted individual look after their health and finances after a life-changing accident or help to counteract the ramifications of a rapidly worsening mental health crisis among working-age adults. Powers of attorney are vital for anyone aged 18 or over – and the system needs an upgrade to cope with an increasingly globalised world.

A global LPA

Individuals with assets in multiple jurisdictions often face daunting legal hurdles if they lose mental capacity. This isn’t just for high-net-worth families, either – adult children can run into difficulties over things like the family holiday home in another country.

The process for getting and ratifying foreign LPAs can be lengthy, expensive and emotionally taxing. Some countries lack the legal framework for creating an LPA, leaving a crucial gap in protection and planning. The sheer amount of admin around maintaining multiple LPAs, topped with changing assets and movement of persons, is enough to put anyone off.

Even when there is such legislation in place, over half (54%) of respondents said the current laws needed strengthening to protect from abuse, with professionals suggesting more accountability and reporting, clearer paths for reporting abuse and more education around what an LPA is for.

With this in mind, respondents agreed that the GRP would be beneficial, with 85% saying the system would be better if one LPA/EPA were created in a jurisdiction that was subsequently recognised and accepted in other jurisdictions. The STEP GRP addresses these challenges head-on, offering a streamlined and efficient approach to safeguarding global assets.

Until the GRP comes into effect, Steele Raymond’s Estate Planning & Tax team can be your partner in navigating cross-border capacity issues. We’ve got the expertise to handle jurisdictional complexities to protect our clients’ interests.

The GRP’s benefits

The STEP GRP represents a significant leap in simplifying the often daunting legal complexities of managing assets across different jurisdictions. By providing a globally recognised template, the GRP streamlines the LPA process and makes it more accessible and less intimidating for families to set up.

With a globally recognised template, individuals can rest assured that their assets are protected, regardless of the mental capacity legislation status in that jurisdiction. This initiative ensures that their assets are managed according to their wishes, safeguarding them against potential financial abuse and exploitation. It acts as a shield, ensuring the rights and interests of vulnerable individuals are upheld across borders.

The portability of the STEP GRP template is a game-changer in international estate planning. It eliminates the need for multiple legal documents across different jurisdictions, reducing bureaucratic hurdles and potential legal conflicts.

The blanket nature of the GRP and its portability would also be a big help in the fight against financial abuse. Often a hidden and underreported problem, financial abuse can devastate individuals and their families, stripping them of their assets and dignity. The high standard of accountability and transparency the GRP sets doesn’t leave any loopholes or wiggle room for would-be abusers.

The next steps

The GRP campaign has received a very positive reception from mental capacity professionals and policymakers STEP has spoken to. The ultimate goal is to make the Global Representative Power a reality for families and individuals looking for a simpler way to handle mental capacity issues across multiple jurisdictions. It’s one of my priorities for the new year as the incoming worldwide chair of the STEP board.

We will continue to meet with policymakers worldwide to make the GRP a reality for families navigating the complex LPA landscape. The aim is to ensure the GRP, should it come into effect, meets three requirements outlined in the STEP report: ensuring global legislation is robust and consistent, safeguarding against abuse and educating about mental capacity and the planning needed for it.

How we can help

While the GRP initiative is a promising development for the future, families still need help sorting their later life plans now. Steele Raymond’s Estate Planning & Tax team offers expert guidance and support to clients with international estate planning and capacity issues.

Our team regularly helps clients set up and manage powers of attorney across borders, so your assets and interests are always protected no matter where they are. We have a wealth of experience in handling different jurisdictional laws and regulations.

We strive to offer the best possible protection and peace of mind even without a globally recognised power of attorney. As the legal landscape evolves with initiatives like the STEP GRP, we’re committed to incorporating these new advancements into our practice to better service our clients.

Get in touch today if you need help with your international estate planning and power of attorney needs.

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