When Lasting Powers of Attorney (LPAs) replaced their more simplistic predecessors (EPAs) in 2007, an opportunity arose whereby the person making the LPA (the donor) could include more specific guidance for their attorneys than had previously been possible. While a few clients chose to stipulate that their attorneys must not, for example, invest in companies supporting certain political parties, far more chose to provide no additional guidance, instead leaving the decision-making in the hands of their carefully chosen attorneys without restriction.
By providing one’s attorneys with an unrestricted LPA and therefore the maximum flexibility to make decisions on the donor's behalf, it was felt that the attorneys would be able to act in the donor’s best interests without issue.
For the last ten years this has remained the case and indeed if your assets do not include an investment portfolio then there is nothing to suggest that an unrestricted LPA is not still the best way to proceed.
We have however within the past week been advised by two stockbroking firms that if attorneys are not given explicit power to place the donor’s investments into a fund that is managed on a discretionary basis then those investments can instead only be managed on an execution only basis.
Obviously, some donors may only wish for their investments to be managed on an execution only basis so this will be no cause for concern; however, if you would want your portfolio to continue to be managed on a discretionary basis or if you would want your attorneys to have the flexibility to alter how your funds are managed, then more detailed wording will need to be added to LPAs going forward.
We have for some months, where agreed as appropriate with the client, been including specific wording within the LPAs that we have been preparing to cover this very issue. However, as LPAs are prepared in accordance with current legislation and guidance, it is well worth a brief review of your LPAs to ensure that they still reflect your needs. Similarly, if you have an EPA and a portfolio that is managed on a discretionary basis then please get in touch as you will need to sign and register a new LPA in order to ensure that your attorneys will be able to maintain this position on your behalf if you are unable to provide such instructions to your broker.
If you think you may be affected by this recent development, then please get in touch with your usual contact or email firstname.lastname@example.org
for more detailed information.