A safeguard against financial abuse

With ageing populations globally and reports stating that dementia cases are set to triple by 2050,[1] issues concerning capacity are increasingly important in work relating to inheritance and succession planning.

STEP and its members have an opportunity to play an active role in assisting clients to plan for incapacity and take advanced decisions ahead of potentially losing capacity in the future. Practitioners are also well positioned to assist clients to put plans in place to provide safeguards should future incapacity lead to vulnerable situations, including abuse or neglect.

We surveyed STEP members globally from June to July 2023, receiving 756 responses from respondents in 44 countries. We sought to:

• establish the impact of increasing incapacity issues on the estate and trust industry and the day-to-day practice of practitioners; and
• gather insight and understanding of the issues for those planning for, or in a position of, loss of mental capacity.

This survey informed STEP’s Loss of Mental Capacity: A Global Perspective report (the Report), sponsored by Alzheimer’s Society. You can download the report at www.step.org/research-reports/mental-capacity

What we found

Three key priorities were identified in the Report.

Safeguarding against abuse

Protecting vulnerable individuals against financial abuse is a clear priority. Increased awareness of the risks among all stakeholders is needed to ensure these are fully understood and addressed in legislation and practice globally.

Education on capacity and associated planning

More needs to be done to educate all stakeholders on issues related to mental capacity and associated planning. STEP can play a vital role in this, from raising public and policymaker awareness about the issues and the need for planning, to working with financial institutions and utility companies to identify and resolve their challenges. Also crucial is supporting practitioners and allied professionals to provide education and guidance in building their knowledge in this area.

Ensuring global legislation is robust and consistent

Legislation and underlying policy vary across the world. Some jurisdictions have implemented robust legislation and regulation, while others either have none or are unsatisfied with their systems. We are calling on jurisdictions globally to implement robust legal frameworks for safeguarding the financial affairs of incapable clients through powers of representation. In line with such initiatives as the Hague Convention on the International Protection of Adults, we believe such frameworks should be consistent to encourage cross-border recognition. We supported this by providing a standard template for such legislation: the STEP Global Representative Power (GRP)

The GRP

The GRP was developed by expert members of STEP[2] in response to the findings of the Report and concerns from practitioners about the absence of a globally recognised and consistent form of lasting/enduring power of attorney (LPA/EPA). It is a template and a benchmark for an LPA/EPA that is globally recognised and portable across borders. It serves as a model best-practice template to governments globally when developing new legislation or reviewing existing provisions. The GRP aims to resolve these concerns by proposing a set of guiding principles that, if adopted globally, would provide consistency and portability while protecting the rights and interests of vulnerable people.

STEP GRP toolkit

The toolkit listed below contains everything you need to implement the GRP in your jurisdiction. It provides guidance for the client, practitioners and any authorities that may adopt the GRP framework.

• Global Representative Power: Guiding Principles
• Global Representative Power: Model Application Form
• Making a Power: Form Guidance
• Global Representative Power: Template Certificate

Find out more at www.step.org/GRP