LPAs And Investment– The New Changes…

The Office of Public Guardian (OPG) has recently confirmed that an express clause specifically permitting attorneys to use a discretionary investment manager is no longer required to be included in a Property & Financial Lasting Power of Attorney (LPA).

In his latest Timms Blog, Wills and Probate Solicitor Matthew Kelly discusses the recent changes to LPAs And Investment…

What Was The Problem?

In 2015 the OPG introduced guidance requiring the donor to include a specific clause if they wished their attorneys to have the option of potentially instructing a discretionary investment manager to assist in managing the financial assets of the donor. This requirement meant that many LPAs made prior to 2015 did not contain the specific clause required meaning attorneys acting under such LPAs were unable to appoint an investment manager or replace one that was underperforming.

What Is The Solution?

After being lobbied by various professional bodies, including the Society of Trust & Estate Practitioners (STEP), the OPG has now amended their guidance and attorneys acting under all LPAs can appoint an investment manager even if the LPA they are acting under does not contain the specific clause permitting the appointment of an investment manager. In essence, the appointment of an investment manager is now permitted under the general auspices of an LPA.

All’s Well That Ends Well?

In relation to the specific issue of attorneys being permitted to appoint investment managers, the situation has been resolved. However, it should be noted that the best part of seven years passed before the OPG amended their 2015 guidance. In the intervening period some donors (that retained mental capacity) with LPAs without the specific clause included chose to make fresh LPAs including the clause (at an additional expense). In instances where the donor had lost mental capacity, attorneys that needed the ability to appoint an investment manager had to make an application to the Court of Protection to obtain retrospective authority to appoint one at significant expense

What Is The Lesson?

Many solicitors, including Timms Solicitors, (prior to 2015) advised their clients of the prudence of including a specific clause allowing their attorneys to appoint an investment manager. Those clients had the benefit of professional advice and could choose whether to include the specific clause – which many did.

There are many other bespoke clauses that can be included in a Property and Financial LPA dealing with matters including, but not limited to, ensuring provision for a spouse, setting out how attorneys work together and possible oversight of attorneys by trusted third parties such as the family accountant.

How Can Timms Help?

Professional advice helps ensure your LPA is fit for purpose and fits the specific circumstances of yourself and your attorneys.

If you have any queries setting up an LPA then please don’t hesitate to contact me on 01283 561531 or at m.kelly@timms-law.com. Alternatively, you can visit the Wills and Probate section of our website here.