Surf

"In the long history of humankind those who learned to collaborate and improvise most effectively have prevailedCharles Darwin"

Is your Property and Finance Lasting Power of Attorney effective?



Introduction

Many of us may have Property and Finance Lasting Powers of Attorney; authorising people we trust to make decisions regarding our finances and property should we ever lose capacity. There is however a danger that unless specific provision was included in this Lasting Power, your attorneys will not have the authority necessary to make decisions on investments you held in discretionary management funds without a court order.

Discretionary management funds

Because of the complexity and necessity for speed when dealing with investment portfolios, most advisors deal with their clients’ investments on a discretionary basis. Essentially the advisor will make the day-to-day decisions as to how to manage those investments and then report to their client on an annual basis with how these have performed.

The issue

In autumn 2015 the Office of the Public Guardian (which is responsible for monitoring and registering Lasting Powers of Attorney) issued guidance setting out that unless the Property and Finance Lasting Power included wording specifically permitting this, attorneys were prevented from investing their donor’s money in funds that gave fund managers discretion as to how to invest those funds. The guidance also appeared to go on to prevent funds being left with investment managers previously appointed by the donor before they lost capacity.

Although only guidance, some financial organisations have taken a strict line with this and now refuse to accept instructions from attorneys where the Lasting Power does not contain specific wording permitting them to invest into discretionary management funds. This has left some attorneys needing to either apply to the Court of Protection to get the authority necessary or have to move the funds to a different investment scheme.

Next steps

Therefore, if you have previously put in place a Property and Finance Lasting Power of Attorney, you may want to check this to ensure your attorneys have the authority necessary to invest into discretionary management funds. And for those of you still looking to create a Property and Finance Lasting Power of Attorney, it is recommended you consider including the necessary discretionary investment wording.

If you have any questions here, either in connection with your existing Property and Finance Lasting Power or in looking to have this prepared with the relevant wording included, please don’t hesitate to contact us.


Article Date: 03/09/2020

< Previous   Return to News List