Is Your Lasting Power Of Attorney No Longer Fit For Purpose?
Anyone who has a Lasting Power of Attorney (LPA) or acts on behalf of someone as part of an LPA will know what a great document it is. An LPA allows you to nominate people you trust to look after your finances and medical care should you lose mental capacity (perhaps through illness or a severe accident). If you don’t have one in place, then your family members will need to apply through the courts to manage things for you.
The Office of the Public Guardian (OPG), the department that registers LPAs has recently issued an update that could have far reaching consequences for anyone looking to invest money on behalf of someone else via an LPA using a Discretionary Fund Manager (DFM). A DFM is an investment manager that once you have made an agreement with them, can make decisions on where to invest without requiring your subsequent approval.
The new guidance from the OPG states that specific wording must be included in the LPA if you wish your attorneys to use a DFM once you have lost mental capacity. Wording is also required if you want your attorneys to stop using a DFM that you had previously set up. Failure to include the correct wording could mean your LPA is not fit for purpose and your attorneys are restricted in how they can best invest your money!
Unfortunately, the wording required is not clear and will depend on the DFM you choose to use. It is vital that you take advice from a professional such as a Chartered Financial Planner.
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.