Investment by attorneys in discretionary management schemes clarified

Investment by attorneys in discretionary management schemes clarified

News the Office of the Public Guardian (OPG) has agreed to change their guidance on the need to have express provision for the management of investments via a discretionary investment provider within a financial Lasting Power of Attorney (LPA) has been welcomed by the Law Society of England and Wales.

The move is a positive step as it will mean those acting under a LPA for a loved one will avoid unnecessary expense and bureaucracy. LPAs are a way for an adult to appoint other people to make decisions about their finances, and their health and welfare should there come a time when they can’t make decisions for themselves. For LPAs to be valid they must be registered with the OPG.

When making an LPA, an adult decides who’ll make decisions on their behalf – therefore becoming their “attorney”. They must be 18 or over and have the mental capacity to make their own decisions. They could be a relative, a friend, a partner or a professional, such as a solicitor.

The OPG’s current guidance on how to make and register an LPA include stipulations that you must include an express power to allow your attorney to invest via a discretionary management fund (DMF) – where day to day management of investments are carried out by regulated professionals. Before 2015, many financial LPAs didn’t contain express provision requiring the attorney to apply to the Court of Protection for authority.

Following discussions with practitioners including members of the Law Society’s Mental Health and Disability Committee and Wills and Equity Committee, the OPG has agreed to review and revise its position.

The OPG is committed to changing its guidance to ensure an attorney can manage funds via a DMF without the express permission of the court.

Law Society president I. Stephanie Boyce said:

“I am delighted the OPG has decided to amend its guidance on how attorneys can invest on behalf of those for whom they’re appointed. It’s in everyone’s interests to avoid the cost of an unnecessary court application.”

Today's Wills and Probate