1.1 Who should read this practice note?
This practice note is for solicitors who don't regularly give advice to clients who:
- are moving abroad
- are retiring abroad
- own property or other assets overseas
They may nonetheless be presented with a mental capacity issue which involves an overseas element.
1.2 What is the issue?
The problems that arise where a client has moved overseas, or owns assets abroad and loses mental capacity are not new. However the increasing number of elderly people in England and Wales, combined with the fact that many more people own property abroad, means that solicitors whose practice does not routinely deal with international issues are increasingly finding themselves faced with cases of this sort.
The purpose of this practice note is to give you a basic practical starting point in such cases. It is important to appreciate however, that this is a complex, specialist topic and that you cannot advise without knowing or consulting the appropriate legal resources.
If neither you nor your firm are familiar with this area of practice you should consider carefully whether it is appropriate for you to give advice. In that context, this practice note aims to give some initial practical assistance.
This practice note relates only to Lasting Powers of Attorney for Property and Financial Affairs (LPAs) and Enduring Powers of Attorney (EPAs), as well as some aspects of deputyship. It does not deal with Health and Welfare Lasting Powers of Attorney, where different or additional issues can arise.
2 Private international law and the Hague Convention XXXV of 13 January 2000
The approach to mental capacity in other jurisdictions may not be the same as it is in England and Wales, and may differ considerably from the provisions of the Mental Capacity Act 2005 (the Act).
Private international law issues that arise when an individual living, or owning property, abroad loses capacity include:
- (a) which country's courts have jurisdiction to make orders in relation to that person's property and affairs
- (b) whether a foreign jurisdiction will recognise and enforce either
- (i) the orders of the courts of England and Wales or
- (ii) an LPA or EPA which is valid in England and Wales
The Hague Convention XXXV of 13 January 2000 on the International Protection of Adults (the convention) seeks to provide solutions in cross-border mental capacity cases. The convention has been ratified by a number of European states (for example France and Germany), but only Scotland has ratified it within the UK.
Scotland and Northern Ireland are each jurisdictions separate from England and Wales for this purpose.
3 Loss of mental capacity in cases involving foreign jurisdictions
In a case where an individual has purchased property overseas and has since lost mental capacity, it may become necessary to sell the foreign property - for example, to pay for care costs.
3.1 Enduring Power of Attorney or Lasting Power of Attorney
The first step will generally be to ascertain whether the individual made the local equivalent of an EPA or LPA in the foreign jurisdiction. If they did, then taking local advice on the possibility of using this local power is likely to be the simplest way forward.
If the individual did not make the local equivalent of an EPA or an LPA but does have an EPA or LPA which has been registered with the Office of the Public Guardian (or by the Court of Protection in the case of an EPA registered before 1 October 2007), that EPA or LPA may be acceptable in the foreign jurisdiction.
You will need to obtain advice in the local jurisdiction to ascertain whether the EPA or LPA is acceptable or not. See section 6: obtaining foreign advice.
3.2 Local requirements
If an EPA or LPA is acceptable in the foreign jurisdiction, local requirements may still have to be met before it can be used.
Precisely what these requirements will be will depend on the advice received on the relevant foreign law. Lawyers or notaries in different jurisdictions may express those requirements differently; for example, they may be more or less cautious.
In some countries, third parties placing reliance on a registered EPA or LPA may be required to have a copy of the EPA/LPA certified as a true copy and then have an apostille affixed to it by the Foreign Commonwealth Office (FCO). See section 4 for more information about this process.
An English or Welsh EPA or LPA may have to be translated into the language of the foreign jurisdiction, and a notarial certificate obtained verifying the accuracy of the translation.
Most legal translation companies can arrange this. Alternatively, you could use a general notary public with the requisite language skills, or a firm of scrivener notaries (public notaries who are proficient in one or more foreign languages and have some familiarity with the legal requirements of those countries).
Such notaries will often be able to provide both the translation and the notarial services under one roof, at least in the case of the most common European languages, such as French and Spanish.
3.3 Deputyship order
If the individual who has lost mental capacity does not have an EPA or LPA in the form prescribed in England and Wales, it may be possible to apply to the Court of Protection for a deputyship order, which may be recognised in the foreign jurisdiction.
This approach is only likely to be appropriate, however, if the individual concerned is habitually resident in England and Wales and merely owns assets in the other jurisdiction.
Recognition of the order and the deputy's powers may not be automatic and a formal application to the local court of equivalent jurisdiction to the Court of Protection will probably be required.
If the foreign court is satisfied as to the deputy's standing, courses open to it include:
- confirming the deputy's authority, providing him with the appropriate authority to act within the overseas jurisdiction
- appointing a local guardian to act and account ultimately to the deputy for any assets realised.
If the individual is habitually resident in the foreign jurisdiction but has some assets in England and Wales, then it may be possible in certain circumstances to bring an application for a deputyship order in the English court to cover the overseas property. However, this is not a straightforward procedure.
Even if available, the order may not be recognised in the foreign jurisdiction and so specific local advice will be needed in each case. See section 6: Obtaining foreign advice.
In the majority of cases, the better course will be to bring the equivalent of deputyship proceedings in either the jurisdiction where the individual is habitually resident or in the jurisdiction where the asset is situated.
You may need to take a similar approach in cases where, although an individual has an EPA or LPA, that power of attorney is not recognised in the foreign jurisdiction.
4 Advising clients before they move abroad or buy property overseas
If you are advising a client who is intending to live overseas, or wants to own a property or other assets abroad, there will be some cases where it is appropriate to raise the possibility of subsequent loss of mental capacity with them. In such cases, you should ideally raise this matter before their departure or purchase: planning ahead can avoid difficulties later on.
You should bear in mind that the advice that may be needed in an international or cross-border situation will be more wide-ranging and specialist than issues simply relating to mental capacity. This is beyond the scope of this practice note.
4.1 Instructing a foreign lawyer
If, in a case that involves a foreign jurisdiction, your client wishes to address the issue of possible future mental incapacity, they will generally need to instruct (probably with your assistance) an appropriate professional in the jurisdiction where they intend to live or own property, so that the professional can advise them of local requirements.
Many jurisdictions have well-developed laws governing the loss of mental capacity and allow an individual to make arrangements in advance to deal with such an event.
For example, many states in the USA permit a person to execute a Durable Power of Attorney, which is akin to an LPA, by which they can appoint an attorney to act in relation to their property and affairs if they lose mental capacity.
Not all jurisdictions have the equivalents of EPAs or LPAs. Despite this, as explained above, in some cases the foreign jurisdiction may recognise an EPA or LPA made under the law of England and Wales, provided certain local formalities or other requirements are met.
See section 6 on obtaining foreign advice.
4.2 Advising on the law of a foreign jurisdiction
Your client may ask you to advise on whether the EPA or LPA that they have already made (or which they now plan to make) will be recognised in the foreign jurisdiction. This is not advice that a solicitor practising only in England and Wales is qualified to give, as the answer will depend on the law of the foreign jurisdiction in question.
The client may or may not be prepared to incur the cost and effort of taking local advice at that stage, given that loss of mental capacity is only a possibility. If they decide against taking advice at that time, but wish to press ahead with making the power, the following two pointers may help:
- As a general rule, if a client who is moving abroad wishes to make a LPA then a better outcome is likely if they make that LPA while they are still habitually resident in the UK, rather than after they have left.
- It is likely to be useful to include a choice of law clause in the LPA, designating the law of England and Wales as the applicable law. This is because a key question in the foreign jurisdiction will be to know what law the document states it is governed by – something which is not explicitly stated on the current LPA form.
You may wish to consider using the following clause which has been agreed by the Office of the Public Guardian:
'This LPA is made in accordance with and governed by the law of England and Wales, which I specify shall be the law applicable to the existence, extent, modification and extinction of this power'.
For want of a better place, the clause probably has to go in the space on the form for restrictions and conditions.
5 Notarisation, certification, the apostille and legalisation
Currently, the primary mechanism for recognition of documents such as EPAs and LPAs internationally is first to obtain a certificate attached to the document and given by a public notary, or sometimes by a solicitor, usually as to the nature or status of the document.
The apostille is a certificate issued by the FCO and attached to the certificate issued by the public notary (or by the solicitor in appropriate cases) as confirmation that the signature, seal or stamp on the document is genuine.
The apostille does not certify the authenticity of the document or give approval of its content. It only confirms the status of the person who gave the certificate.
In the case of an EPA or LPA, the apostille will confirm that the public notary or solicitor who has given the certificate is known to the FCO.
Where a notarial certificate is given by a public notary qualified in England and Wales the public notary may be able to assist in formulating the appropriate form of notarial certificate (though the precise certificate that is required will depend on the advice of the local notary or lawyer), and he or she will also be able to obtain the apostille.
In some cases the foreign lawyer or notary may require the certificate to be one of due execution, again with an apostille affixed. However a certificate of due execution can generally only be given if the power was originally signed before the notary (ie the public notary must have given the certificate at the time of signing).
5.1 Registering with the Foreign Commonwealth Office
The signatures of all public notaries are already registered with the FCO. If a solicitor wishes to register their signature with the FCO they need to provide the FCO with the required evidence.
Provided evidence of a solicitor's identity and signature has been accepted by the FCO, then the FCO will affix an apostille to a solicitor's certificate, verifying the solicitor's identity.
In some cases using a solicitor's certificate may be attractive because it may be simpler and cheaper than the involvement of a public notary.
You should be aware, however, that some jurisdictions, particularly those based on civil law, may refuse to recognise a certificate that has been given by a solicitor rather than a public notary. Before adopting this approach you need to consider whether a solicitor's certificate will be acceptable in the jurisdiction in which you propose to use the document.
5.2 Obtaining an apostille
If you are not using a public notary, and are not a solicitor who subscribes to the FCO's premium service to obtain apostilles, then an apostille can be obtained by making a postal application to the FCO at Milton Keynes. Details can be obtained from the FCO's website.
6 Obtaining foreign advice
In all circumstances where advice on the law of a foreign jurisdiction is needed it should be obtained from a practitioner suitably qualified in the law of that jurisdiction.
Unless you are dual qualified it is not appropriate for you to try to provide advice on the local law yourself, even if you have previous practical experience of that jurisdiction. The law or formalities may have changed, or the particular notary or lawyer with whom the attorney or deputy will have to work (for example to sell the property) may insist on requirements different from those imposed in the last case.
Details of advisers in foreign jurisdictions can be found from a number of sources, including:
You can get details of public notaries practising within England and Wales from the Notaries Society and a list of scrivener notaries is maintained by the Society of Scrivener Notaries.
7 Time and expense
Cross-border issues will inevitably add to costs. Your client may require advice not only from you but also in the local jurisdiction, and may also have to provide notarised and translated documents.
In addition, matters are likely to take longer than they would if there were no foreign element.
The client should appreciate that different time zones, language differences and local procedures may all affect the speed and cost with which matters can be concluded.
8 More Information
Mental Capacity Act 2005
The Hague Convention XXXV of 13 January 2000 on the International Protection of Adults
8.2 Further products and support
8.2.1 Practice Advice
The Law Society provides support to solicitors on a wide range of areas of legal practice. The service is staffed by solicitors and can be contacted on 020 7320 5675 from 09.00 to 17.00 on weekdays.
Visit the Practice Advice Service.
8.2.2 Professional Ethics Helpline
Solicitors Regulation Authority's Professional Ethics Helpline gives advice on conduct issues.