Big picture 19 October 2023 Issue 5 Ben Bell

Time to get a GRP

Ben Bell introduces the new STEP Global Representative Power framework for global powers of attorney

One of STEP’s key policy initiatives this year has been to design a ‘gold standard’ enduring power of attorney (PoA) to better address mental capacity issues. First, a dedicated working group received overwhelming feedback from STEP’s recent survey, ‘Global Perspective: Loss of mental capacity’, which highlighted some of the common and prominent issues. The group also drew on its own practical experience as estate planners in various countries to propose simply and coherently how to plan for clients’ property and financial affairs upon incapacity.[1]

The result is the STEP Global Representative Power (the GRP): a template and a benchmark for an enduring PoA that is globally recognised and portable across borders, and that jurisdictions can look to when seeking/initiating new legislation where it fails to exist, or reviewing existing provisions for efficiency, effectiveness and best practice. Considerable feedback from STEP’s global membership identified the absence of a universally recognised and understood PoA law as a significant barrier when acting for and adequately protecting and upholding the rights and interests of vulnerable clients, particularly in the cross-border context.

The results of STEP’s recent mental capacity survey reinforced the need for STEP to deliver a comprehensive global representative powers template, with jurisdictions such as the Cayman Islands and Malaysia being 83 and 100 per cent, respectively, in favour of PoA legislation being introduced. Survey figures indicated that more than 80 per cent of all STEP practitioners, in all jurisdictions without any PoA legislation, would support such a law. There was also a clear acknowledgement that cross-border recognition and portability of powers are needed as part of any future legislation.

Guiding principles

The GRP provides consistency through a clear set of guiding principles that form the basis of our proposed framework. We identified flexibility and accessibility as key; individuals making any enduring or lasting PoA often wish to include directions, wishes or limits, and this is facilitated through the GRP. Further, the legislative framework must safeguard against the misuse of a power of representation and protect the rights and interests of vulnerable people. This was also emphasised in the survey, with 53 per cent of respondents identifying stronger safeguards as necessary to mitigate abuse.

Essential features

We sought to ensure the GRP is consistent in its language and can be accurately and fairly applied in various jurisdictions, regardless of local legal terminology. For this reason, our use of the term ‘global enduring representative power’ encompasses all versions of lasting and enduring PoAs, or equivalent measures of protection and powers of representation, with our version adopting the terminology of enduring. For the benefit of cross-border recognition, we recommend that jurisdictions use the terminology outlined in the GRP when considering enduring PoA legislation.

Streamlining standards is also a vital feature of the GRP, as we acknowledge that the variance in cross-border situations is a cause of confusion. STEP has long supported the objectives of the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters in bringing uniformity to cross-border recognition of enduring PoA legislation, and it has been used as a guide in this respect. For example, this will include defining a person’s decision-making ability as context-specific, as well as recognising decision-making ability as fluid and rights-based.

Safeguarding the most vulnerable

Mitigating the financial abuse of vulnerable clients has been a key consideration of the working group. Through this work, we have discovered multiple jurisdictions without an enduring PoA legal framework in place. This is especially concerning as the ever-growing, ageing global population means the risk of developing dementia and Alzheimer’s disease is higher, as is, sadly, the risk of financial abuse. This is why the GRP framework endorses a number of safeguards aimed at preventing abuse. These include restrictions on who is able to make or witness a GRP, who may be appointed as a representative and ensuring clarity around decision-making matters in the event of marriage or divorce. Individuals are also able to revoke their GRP while they maintain decision-making capacity.

This is just a taste of what to expect from the GRP. We look forward to engaging with prospective jurisdictions to consider the benefits of implementing a coherent enduring PoA framework. STEP members can expect to hear more about our GRP in the coming months.

[1] The scope of this project is limited to the appointment of decision makers for financial and property matters. It does not extend to personal matters such as a person’s health, medical or lifestyle matters, although STEP acknowledges and recognises that some jurisdictions enable the appointment of substitute decision makers for both financial and personal matters within one document.