OPG To Change Guidance on Express Discretionary Investment Clauses

STEP has announced that the Office of the Public Guardian (OPG) is changing its guidance in relation to the inclusion of express discretionary investment management clauses in Property and Financial Affairs Lasting Powers of Attorney (LPA's).

Previously, if Donors wished for their Attorneys to manage their financial assets with the assistance of a discretionary investment manager or, wished for their investments to continue to be managed in such a way, express provision would need to be made within the LPA at the time of making the document. Now, Attorneys will be able to use an investment manager regardless of whether or not the LPA makes provision for this.

For those unaware of the previous requirement, their Attorneys would be unable to appoint an investment manager to help them manage the Donor’s affairs or, change an investment manager if one was already acting. Given that the majority of Attorneys appointed under Property and Affairs LPA's are lay Attorneys and not acting in a professional capacity, the previous guidance did little to assist those who do not have the expertise to manage another’s affairs without the help of a professional.

As a result, if an express provision was not included in the LPA at the time of making it and the Donor still had capacity, they would have to start again and create a new LPA, revoking the existing document and incurring all the associated fees and costs. If the Donor had lost capacity, their Attorneys had to apply to the Court of Protection to obtain retrospective authority, this being a timely and expensive process.

Clearly the new guidance will be a welcome change, allowing Attorneys to manage financial assets with the professional expertise of an investment manager, regardless of whether or not this was expressly provided for within the LPA.

Although the OPG has verbally confirmed the change, it is unclear when the guidance will be formally updated. STEP understands that this confirmation will be sufficient to allow such appointment in the interim, although practitioners may find it prudent to continue to include express authority.

If you have any questions or queries, please do not hesitate to contact our private client team on 01484 821500 or via email willsandprobate@ramsdens.co.uk