Trust and estate advisors in Malaysia support STEP Global Representative Power to help people plan for future incapacity

Tuesday, 19 December 2023

Trust and estate advisors in Malaysia are supporting a new initiative from STEP, the global professional association for advisors of families across generations, to help people plan for future incapacity.

In many countries around the world, people can plan for a potential future loss of mental capacity by making a lasting or enduring power of attorney. This enables them to choose someone they trust to make financial decisions on their behalf if they no longer have the mental capacity to do so.

Although Malaysia does not currently have the legal framework to enable such planning, STEP is pleased that awareness for legislations on mental incapacity is seriously being considered.

To assist governments globally in developing or reviewing their legal frameworks in relation to mental capacity, STEP has developed the Global Representative Power (STEP GRP).

The STEP GRP is a model ‘best-practice’ template for a legal framework. It has been developed by a group of STEP’s expert members in response to concerns from practitioners about the absence of a globally recognised and consistent form of lasting power of attorney.

This lack of consistency from one country to another can present significant barriers to protecting and upholding the rights and interests of vulnerable people, particularly in an age where many people have property and family in different countries.

In a recent survey of STEP’s members, 100% of respondents in Malaysia told us they expect to see an increase in capacity-related issues. The survey findings were published as part of a major new STEP report on mental capacity (see notes to editors for more details).

Farah Deba TEP, Chair of STEP Malaysia, said: ‘The challenges of an ageing population mean that increasing numbers of people in Malaysia need to plan for what would happen if they were to lose mental capacity.

‘Malaysia must step up in having a legislation to address basic issues affecting the lack of capacity. This will be a good start towards recognising a global standard or other cross border representative power instruments.

‘We are pleased to be sharing our expertise with the stakeholders in Malaysia to support them in their work to introduce lasting power of attorney legislation.’

Notes to Editors

More information on STEP’s Global Representative Power can be found at https://www.step.org/GRP

To find out about the issues and challenges associated with loss of mental capacity, we ran a survey in partnership with the Alzheimer’s Society in June/July 2023. We received nearly 800 responses from our members in 44 countries. The results have been captured in a report, Loss of Mental Capacity: A Global Perspective.

Key findings include:

  1. Capacity issues and requests for advice on the issues have been increasing and will continue to increase. 
  2. Financial abuse is increasing. 
  3. Capacity is a complex issue for practitioners, service providers and families. 
  4. Although the lasting/enduring power of attorney is an important tool for planning for future incapacity, there are barriers and issues to be addressed locally and through policy and legislation.
  5. There is a demand for cross-border recognition and portability of LPA/EPA powers.

The report makes three key recommendations, all of which require collaboration with legal associations, governmental and nongovernmental organisations, charities, financial institutions and health care professionals to formulate better and more universally accepted and applicable policy.

  1. Ensure global legislation is robust and consistent – We are calling on all jurisdictions globally to implement robust and consistent legal frameworks for safeguarding the financial affairs of incapable clients through powers of representation – an aim we hope to achieve with the STEP GRP.
  2. Safeguard against abuse – STEP will work to raise awareness of the risks among all stakeholders to ensure these are fully understood and addressed in legislation and practice globally.
  3. Educate about 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, as well as supporting practitioners and allied professionals to provide education and guidance to build their knowledge in this area.

ENDS

For more information, please contact Liz Skinner, Communications Manager, STEP, email liz.skinner@step.org or call + 44 3752 3706, or Ellen Carroll, Nellie PR, email ellen@nelliepr.co.uk or mobile 07790631547.

About STEP, the professional body for inheritance advisors

STEP is the global professional association for practitioners who specialise in family inheritance and succession planning. We have more than 21,000 members in 96 countries. STEP works to improve public understanding of the issues families face in this area and promotes education and high professional standards among its members.

STEP members help families plan for their futures, from drafting wills to issues surrounding international families, protecting the vulnerable, family businesses and philanthropic giving. Find out more at www.step.org