(The one document that refuses to cross borders - and why you need it)
When we talk about financial planning, everyone wants to talk about the fun stuff: high investment returns, the potential for a work-optional life, and tax-free withdrawals.
Very few people want to talk about what happens if they lose the mental or physical capacity to manage their own money. It’s not a fun conversation. But if you hold assets across multiple countries, it is an absolutely critical subject to discuss.
If you live in France but own property in the UK, or if you’re an American expat with investment accounts back home, you might assume that drawing up a single Power of Attorney (POA) covers you globally.
Unfortunately, it does not.
Here are four reasons why your Power of Attorney may not work across the border, and exactly what you need to do about it.
1. The law does not travel well
Different countries have entirely different legal frameworks for mental capacity. In England and Wales, you use a Lasting Power of Attorney (LPA). In France, you might use a mandat de protection future. If you take a perfectly valid English LPA to a French bank or a US registrar and ask them to accept it, you will almost certainly be met with a blank stare.
2. The Hague Convention loophole
There is actually an international treaty designed to make this easier: the Hague Convention on the International Protection of Adults. It’s supposed to ensure that a POA made in one country is recognised in another.
The challenge? While countries like France, Scotland and Switzerland have ratified it, England, Wales, Spain, and many others have not*. Because of this, an English LPA has no automatic legal effect in many European jurisdictions.
3. Institutions absolutely hate risk
Even in the rare cases where a foreign POA might theoretically be recognised, banks and financial institutions are notoriously risk-averse. They seldom understand foreign legal systems, they can’t easily verify the document's validity, and they are hyper-aware of liability. Rather than risk accepting an invalid document, they will usually just say no.
4. The cost of getting it wrong
If you lose capacity and your foreign POA is rejected, your family is left in an administrative nightmare. Bank accounts get frozen. Properties cannot be sold to fund your care. To gain control of your foreign assets, your family may have to drag the matter through the local courts to obtain a deputyship order.
It’s a slow, incredibly expensive, and deeply stressful process.
The solution is actually very straightforward, though it requires a bit of admin upfront. If you hold significant assets in multiple jurisdictions, the safest approach is to have a local equivalent of a Power of Attorney drafted in each of those countries.
It costs a little time and money now, but it’s the ultimate insurance policy for your family's peace of mind. Get the paperwork sorted while you have the capacity to do so, and let your assets do their job.
*At the time of writing this blog