Specialists Say ‘Very Few Think To Check What Needs To Be Done’
Later life planning experts at leading national law firm Irwin Mitchell Private Wealth have warned about the risk of managing overseas assets, such as holiday homes, for loved ones who have lost mental capacity.
Currently, those concerned for what will happen to their assets if they lose mental capacity can arrange for a lasting power of attorney (POA) or a deputy to make decisions on their behalf once they have lost capacity – but this only applies to assets held in the UK, and the situation quickly becomes more complicated when international assets are involved.
Buying a second home abroad has become a popular venture: according to the Daily Telegraph, the most popular places for the British to buy a holiday home are Spain, France, Portugal and Italy.
However, specialists warn how the same problems can happen closer to home. Scotland and Northern Ireland both have different legal systems to England and Wales; families living on the borders of these countries might have more difficulties than most if they have assets on both sides of the border.
As business has become more global, it’s also much more common for British-based businesses to outsource some of their operations to countries where it is cheaper to manufacture goods – and presenting another risk to business owners who may lose capacity in old age.
Expert Opinion“Modern day travel has made the world much smaller, and far more people own property and investments in different countries. Unfortunately, nobody really seems to consider the implications of overseas legal systems when dealing with a relative’s incapacity.” Kelly Greig - Partner
Experts advise that families check whether their loved one has the equivalent of an English POA in the country they own the asset, whether that be property or commercial interests. If they don’t, the family will then need to see what the country in question’s rules are for recognising any English POA or Court of Protection order.
However, families should be careful as currently there is no uniform obligation for other countries to accept any orders from the Court of Protection or an English POA, as each country has its own system of dealing with incapacity matters.
Kelly continued: “Unfortunately, there is no worldwide consensus on how assets held in different jurisdictions should be managed if a client loses capacity. It’s therefore vital that families seek advice from solicitors in each country any assets are held in to try and foresee any problems in the process.
“Each country is different, so you will need to get specialist advice in each territory to find out what the country’s requirements are and, if necessary, on how you can take out protective measures on any assets there.
“Preparing ahead of time takes some of the stress out of dealing with a loved one’s decline in mental capacity, which is always a heart-breaking situation. The last thing anyone wants is the worry of any assets in far-flung countries becoming lost.”
Irwin Mitchell Private Wealth is hosting its first Later Life conference on the 2nd April - book your place here.