When planning a move to or from the UK, it’s an opportune time to review, supplement or replace your incapacity planning arrangements. Once your decision to relocate has been made, there is sure to be a whole host of items on your moving checklist. Putting in place or reviewing existing incapacity planning may not feel like a natural priority, but it ought to be.
Reviewing your power of attorney when relocating to the UK
For those relocating to the UK, the most common form of UK incapacity planning involves making a lasting power of attorney (LPA). An LPA is a legal document that allows the donor to nominate someone to manage their financial affairs (known as a Property & Finance LPA) or make decisions regarding their welfare (known as a Health & Welfare LPA). These documents offer the donor a greater degree of certainty as to what will happen if they cannot make these decisions for themselves.
If you were to lose capacity to manage your affairs without having LPAs in place, your family or friends would need to make an application to the Court of Protection to appoint a deputy to manage your affairs. However, this route is a more lengthy and costly process compared to LPAs and there is a lack of control over how your affairs should be managed and by whom. This makes LPAs a far more attractive option for many.
Incapacity planning and managing assets abroad: What UK expats need to know
For those leaving the UK, while LPAs are an effective incapacity planning solution for your UK assets, there are various things to think about when it comes to your assets abroad. For example, consider whether your UK LPAs can be used to manage your non-UK assets or make decisions about your welfare outside of the UK. If they can be used abroad, certain legal steps might be needed before they can be used locally in your new jurisdiction.
Many jurisdictions offer a local alternative to an LPA which might be a more efficient way of managing your non-UK assets. At the same time, it is important to be aware of any key differences between a foreign power of attorney and a UK LPA. For example, in some countries such as Cyprus and Italy, a power of attorney becomes invalid upon the donor’s loss of capacity (in contrast to UK LPAs which remain effective following the donor’s loss of capacity). Countries like the British Virgin Islands, for example, don’t have any equivalent to UK LPAs but there may be other arrangements that could be made (e.g. changes to the governing documents of any companies located there). Proactive consideration of the position in the various countries where assets are owned is essential.
There will be many items on your administrative checklist before arriving in or departing the UK and your incapacity arrangements (existing or otherwise) certainly deserve their place on that list. We would be delighted to assist you with any queries you may have - please contact Katya Vagner or Zevi Wulwick for further support.
