Discretionary Management Under an LPA
242 Mar 2022
We welcome the announcement by the Office of the Public Guardian (‘OPG’) earlier this month regarding discretionary investment management. The OPG has made the positive statement that there is no need for attorneys operating under a Lasting Power of Attorney (‘LPA’) to have an express power to appoint a discretionary investment manager.
In 2016, the OPG had issued guidance that suggested that an express power needed to be included in all LPAs if the attorneys wished to use the services of a discretionary manager. Many in the industry had challenged why this particular sector had been singled out when similar provisions do not apply to any other form of financial investment. Since 2016, if the LPA was silent, some attorneys were forced to apply to the Court of Protection to add language giving them power to use a discretionary manager, a time consuming and expensive process. This announcement clarifies the position for all of those granting or using LPAs and means that in situations when an LPA comes into effect, there is no need for concern about any existing discretionary arrangements or any decision to enter into them by the attorneys in future.
LPAs are an important tool in the protection of vulnerable people. Friends, family or professional advisers, known as attorneys, are appointed to look after the financial matters or overall health and welfare of an adult who has lost capacity to do so. Like wills, LPAs can be put into place at any time so, in the event that the arrangement becomes necessary in the future, the attorneys can take up responsibility once they have registered the LPA with the OPG. A simple form is available online and there is no cost involved unless professional advisers are to take on the role of attorneys. The LPA generally remains in place until the donor dies, when the executors of the estate then take over responsibility for the assets.
Further information can be found at https://www.gov.uk/guidance/making-and-registering-an-lpa-during-the-coronavirus-outbreak.
