In case of advanced age and the onset of dementia, the loss of mental capacity of a family member can present legal obstacles when relatives need to access their savings or sell their property to fund their future care.
In the UK a Lasting Power of Attorney (LPA) is a useful tool which can be signed and registered with the Office of the Public Guardian in advance of a person losing capacity. The LPA can be signed to allow attorneys to manage a person’s Property and FInancial Affairs and/or for Health and Welfare.
There can be insurmountable obstacles when the family member owns property or bank accounts overseas, or where the family member lives alone overseas and the family need to appoint a trusted person to act as the guardian, as the LPA may not be recognised in another jurisdiction. The Lasting Power of Attorney is not automatically recognised in Italy, at the present time, for several reasons.
Firstly, in order for a power of attorney signed outside Italy to be valid, Italian law requires that the signature of the donor must have been properly authenticated. This means that the person witnessing the signature must confirm they have checked their details, name date and place of birth against a valid identity document. This point was reinforced in a recent judgement of the Italian Supreme Court (Sentenza no. 2866 of 5 February 2021, Corte di Cassazione – Sezioni Unite) where it was held that a PoA notarized abroad shall be considered null and void if it lacks the Italian translation of (i) the PoA itself and (ii) the notarization.
Secondly, a power of attorney is only valid in Italian law as long as the donor has mental capacity to give instructions. However, the rules of Italian Private international law on mental capacity do accept that matters of capacity are governed by the national law of the individual concerned. The rules of the Mental Capacity Act 2005 should therefore be recognised as applying to a British national in Italy.
The Hague Convention on the International Protection of Adults of 2000 is shortly to be adopted into Italian law. From that point onwards, cross-border mental capacity issues in Italy will be governed by the law of the place of habitual residence of the invididual concerned. The Hague Convention, although ratified by the United Kingdom, is only applicable currently in Scotland.
Where family members have been appointed as attorneys in a LPA, and need to manage the property and financial affairs of a family member in Italy, it may therefore be possbile to do so if a) the signature of the donor was witnessed by a Notary in the UK and/or b) if the registered LPA is legalised by the Foreign and Comonwealth Office and translated into Italian. This is not guaranteed however, all will depend on the willingnewss of the bank or the Italian Notary being persuaded and willing to accept its validity in a transaction. The family may need to take the further step of applying for a Court of Protection Order with specific powers granted to deal with overseas assets.
The Society of Trusts and Estates Practitioner has called on all jurisdictions globally to implement robust legal frameworks for safeguarding the financial affairs of incapable clients. This is particularly urgent as the WHO reported in 2017 that between 2015 and 2050 the proportion of the world’s older adults will almost double from 12% to 22%. STEP has drafted a template power of attorney (Global Representative Power).
For further reading on the development of cross-border law in this area see: Loss of Mental Capacity: A Global Perspective written in collabotation with the Alzheimer’s Society.
Charlotte Oliver is a full member of the Society of Trusts and Estates Practitioner and a member of the STEP Italy Special Interest Group on Mental Capacity.
