Capacity across borders: future-proofing international assets and decision-making

The internationalization of wealth combined with people living longer and the prevalence of dementia means that it is increasingly important to think about who looks after your affairs if you are not able to. 

A person may live in one country, hold assets in another, and receive care or treatment in a third. This is particularly common for internationally mobile families with connections to jurisdictions such as Hong Kong and England, where differing legal frameworks can create complications if capacity is lost. When that person loses capacity, advisers and families often discover that the legal frameworks governing decision-making and representation do not align. The result can be delay, uncertainty, cost and significant practical difficulty at precisely the moment when clarity is most needed.

The central challenge is that there is no universal law of capacity. Some jurisdictions have sophisticated capacity law; some still rely on older legislation or fragmented rules; and others are in the process of updating, but new laws are not yet in force. Even where the broad objective is similar, the underlying legal tests may differ in ways that affect both outcomes and procedure.

Legal frameworks

Hong Kong's capacity law reflects historic English legislation from the 1980s. The legal framework around capacity law has not developed in the way that it has in England and Singapore, although change has been promised – and work done towards it – for many years. For example, as matters stand in Hong Kong, when looking at a person's capacity to manage their property and affairs, it is looked at as a whole. So, in theory, a person may be deemed incapable of managing their property and affairs, even if they are able to manage some aspects (e.g. paying household bills), but not others (e.g. making a loan). In contrast, in England and Singapore, there is a statutory test of capacity that is time- and issue-specific. 

The lack of consistency between jurisdictions presents real challenges if a person loses capacity with assets/interests spread across the world.

The Hague Convention on the International Protection of Adults was designed to reduce cross-border issues by creating a framework for recognition, enforcement and co-operation in relation to adults who are unable to protect their interests.

Hong Kong is not a signatory to the Convention – in fact, few countries are, with most of those being in Europe.

The United Kingdom is a signatory, but it has only ratified it in Scotland. However, there is a mechanism requiring English Courts to recognize and enforce certain orders relating to incapacitated adults from any foreign jurisdiction, whether or not that country is a signatory. Thus, a Hong Kong Enduring Power of Attorney Ordinance should be accepted by the English court under the Mental Capacity Act 2005 because it is of like effect and form to an English Lasting Power of Attorney. However, an English Lasting Power of Attorney would not be automatically recognized in Hong Kong.

What can you do?

The key practical point is that individuals should plan for incapacity with the same (if not more!) care than they plan for what happens after they die. Many clients understand the importance of having a valid will, but fewer consider whether their powers of attorney will continue to operate effectively if capacity is lost and action is needed overseas. The relevant question is not only whether a document is valid where it was signed, but whether it will be recognized, accepted and workable where decisions actually need to be made and if the other country has an LPA equivalent which could also be made.

Change on the horizon?

It appears that there is a growing recognition that domestic capacity regimes must adapt to an increasingly international world.

Within the European Union, new measures on the protection of adults in cross-border situations have been advancing, with the European Council agreeing its position in 2026 on rules intended to improve recognition of protective measures and powers of representation across Member States. 

In parallel, the Society of Trust and Estate Practitioners has developed the STEP Global Representative Power as a model intended to promote greater consistency and portability in cross-border incapacity planning. It is not clear how many countries have adopted it or are looking to do so, but Cayman at least has plans to introduce in 2027.

Conclusion

Early planning and jurisdiction-specific advice remain essential. A well-drafted document is important, but in cross-border cases the real question is whether it will work when and where it is needed most.