STEP Webinar: Mental Capacity: A Global Perspective
On November 27, 2023, I attended the STEP webinar on ‘Mental Capacity: A Global Perspective’[1]. The program comprised of a panel of experts who discussed the new STEP research report, Loss of Mental Capacity: A Global Perspective[2] (the “Report”) sponsored by Alzheimer’s Society.
Panel of Experts
Alex Ruck Keene from 39 Essex Chambers moderated the panel that included Kathleen Cunningham, Claire van Overdijk from Carey Olsen Bermuda Limited, Helen Quinn from Alzheimer’s Society, and Jonathan Upton from Estatesearch. Their discussion focused on current challenges in overcoming financial abuse, as well as inconsistency and inadequacy in current legal frameworks respecting powers of representation globally.
The Report
The Report is a result of a research survey sent to STEP members, which includes solicitors, barristers, accountants, trustees and other practitioners, over the months of June and July 2023.
It highlights the impact of increasing capacity related issues and concerns in the estate and trust industry. The research survey received 756 responses from respondents in 44 countries.
The Report supports practitioners to be well positioned to assist clients to plan and take advanced decisions.
The key findings of the Report are broken down as follows:
- Capacity issues and requests for advice have been increasing and will continue to increase, noting that an ageing population is the primary reason for this increase;
- Financial abuse is on the rise;
- Capacity is a complex issue for practitioners, service providers and families;
- Although the power of attorney is an important legal tool for planning for future incapacity, there are barriers and issues to be addressed locally through policy and legislation;
- There is a demand for cross-border recognition and portability of powers of attorneys[3].
Financial Abuse
The global population is ageing fast [4], and issues concerning capacity are important and relevant in all aspects of work relating to inheritance and succession planning[5].
When a person loses capacity over time, they become more vulnerable to abuse.
The Report informs that 57% of the survey respondents had already experienced financial abuse or suspected financial abuse, and 39% indicated that they observed an increase in the last 2 years[6]. The statistics reinforce what is already known in the industry, which is that the main perpetrators are often family members, friends or caregivers.
As a result, financial abuse is most prevalent when there is uncertainty whether a person lacks mental capacity to make decision for themselves (40%), or when a representative is exercising their authority on behalf of the incapacitated person (36%)[7].
Elder abuse is defined by the World Health Organization as a single or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust, which causes harm or distress to an older person[8]. According to the World Health Organization, 15% of older adults experience some form of abuse[9].
Cross-Border Recognition of Powers of Representation
The Report reinforces the importance of educating and assisting professionals who deal with older adults in building their knowledge and skills about capacity. There is a demand for cross-border acceptance of powers of attorney as 88% of the respondents agreed that it would be beneficial to mitigate abuse.
An international acceptable enduring power of attorney would be of great value[10]. It is an essential step for safeguarding against abuse. The Report recognizes that it is a lengthy, costly, and challenging process, nevertheless it will create a global language and terminology for the powers of attorney. It will benefit an increasing number of families whose assets are spread across different countries.
Current Trends
The current trend is that family members are more often the perpetrators, and romance predatory scams are on the rise. The Report indicates that when a person loses mental capacity, they are at higher risk of financial abuse.
In addition, the Report emphasizes how the pandemic created a difficult environment for vulnerable people as they were socially isolated. It alerts the public and practitioners to be vigilant for warning signs if they know a vulnerable person who could be a target of potential target for abuse.
The Way Forward
In summary the Report suggests the way forward includes measures such as:
- ensuring that global legislation is robust and consistent;
- safeguarding against abuse; and
- educating about capacity and associated planning. STEP has developed another important guide, A Guide to Assist Persons in Vulnerable Situations.
This was a helpful and informative webinar!
—
[1] https://www.step.org/web-event-library/mental-capacity-global-perspective
[2] https://www.step.org/research-reports/mental-capacity
[3] Ibid at page 6
[4] WHO Fact Sheet on the Mental Health of Older Adults: https://www.who.int/news-room/fact-sheets/detail/mental-health-of-older-adults
[5] Report at page 6
[6] Ibid at page 22
[7] Report at page 24
[8] Ibid
[9] WHO Fact Sheet on Abuse of Older People: https://www.who.int/news-room/fact-sheets/detail/abuse-of-older-people
[10] Report at page 40
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Written by: WEL Partners
Posted on: December 23, 2023
Categories: Commentary, WEL Newsletter
On November 27, 2023, I attended the STEP webinar on ‘Mental Capacity: A Global Perspective’[1]. The program comprised of a panel of experts who discussed the new STEP research report, Loss of Mental Capacity: A Global Perspective[2] (the “Report”) sponsored by Alzheimer’s Society.
Panel of Experts
Alex Ruck Keene from 39 Essex Chambers moderated the panel that included Kathleen Cunningham, Claire van Overdijk from Carey Olsen Bermuda Limited, Helen Quinn from Alzheimer’s Society, and Jonathan Upton from Estatesearch. Their discussion focused on current challenges in overcoming financial abuse, as well as inconsistency and inadequacy in current legal frameworks respecting powers of representation globally.
The Report
The Report is a result of a research survey sent to STEP members, which includes solicitors, barristers, accountants, trustees and other practitioners, over the months of June and July 2023.
It highlights the impact of increasing capacity related issues and concerns in the estate and trust industry. The research survey received 756 responses from respondents in 44 countries.
The Report supports practitioners to be well positioned to assist clients to plan and take advanced decisions.
The key findings of the Report are broken down as follows:
Financial Abuse
The global population is ageing fast [4], and issues concerning capacity are important and relevant in all aspects of work relating to inheritance and succession planning[5].
When a person loses capacity over time, they become more vulnerable to abuse.
The Report informs that 57% of the survey respondents had already experienced financial abuse or suspected financial abuse, and 39% indicated that they observed an increase in the last 2 years[6]. The statistics reinforce what is already known in the industry, which is that the main perpetrators are often family members, friends or caregivers.
As a result, financial abuse is most prevalent when there is uncertainty whether a person lacks mental capacity to make decision for themselves (40%), or when a representative is exercising their authority on behalf of the incapacitated person (36%)[7].
Elder abuse is defined by the World Health Organization as a single or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust, which causes harm or distress to an older person[8]. According to the World Health Organization, 15% of older adults experience some form of abuse[9].
Cross-Border Recognition of Powers of Representation
The Report reinforces the importance of educating and assisting professionals who deal with older adults in building their knowledge and skills about capacity. There is a demand for cross-border acceptance of powers of attorney as 88% of the respondents agreed that it would be beneficial to mitigate abuse.
An international acceptable enduring power of attorney would be of great value[10]. It is an essential step for safeguarding against abuse. The Report recognizes that it is a lengthy, costly, and challenging process, nevertheless it will create a global language and terminology for the powers of attorney. It will benefit an increasing number of families whose assets are spread across different countries.
Current Trends
The current trend is that family members are more often the perpetrators, and romance predatory scams are on the rise. The Report indicates that when a person loses mental capacity, they are at higher risk of financial abuse.
In addition, the Report emphasizes how the pandemic created a difficult environment for vulnerable people as they were socially isolated. It alerts the public and practitioners to be vigilant for warning signs if they know a vulnerable person who could be a target of potential target for abuse.
The Way Forward
In summary the Report suggests the way forward includes measures such as:
This was a helpful and informative webinar!
—
[1] https://www.step.org/web-event-library/mental-capacity-global-perspective
[2] https://www.step.org/research-reports/mental-capacity
[3] Ibid at page 6
[4] WHO Fact Sheet on the Mental Health of Older Adults: https://www.who.int/news-room/fact-sheets/detail/mental-health-of-older-adults
[5] Report at page 6
[6] Ibid at page 22
[7] Report at page 24
[8] Ibid
[9] WHO Fact Sheet on Abuse of Older People: https://www.who.int/news-room/fact-sheets/detail/abuse-of-older-people
[10] Report at page 40
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