A lasting power of attorney ("LPA") is a document put in place while you have capacity to cater for the possibility that you may lose the ability to look after your affairs. Under an LPA you appoint an attorney (or attorneys) to make financial decisions (under a "finance LPA") or health and care decisions (under a "health and care LPA") when you are not able to.

To date, the advice from the Office of the Public Guardian ("the OPG"), which registers and monitors the use of LPAs, has been to include a discretionary management clause in the finance LPA. This allowed your attorneys to instruct discretionary investment managers to assist in preserving and growing your assets. Without such a clause, once you lost capacity, your attorneys would have to apply to the Court of Protection for authority to do this.  As well as the costs of making such an application, the time it can take risks the value of your assets diminishing in the meantime. 

The OPG has just announced that LPAs no longer require this wording and that attorneys will be able to delegate investment management to a discretionary investment manager without a court application. So far, so good. However, professionals are encountering that rare occurrence of reality lagging behind the law. Anecdotal evidence suggests that some financial institutions are still insisting upon there being an express power in the LPA (notwithstanding the OPG's declaration) before they will accept instructions, leaving donors of LPAs in a quandary as to whether or not to include the clause nonetheless. 

We recommend that now, more than ever, people seek legal advice when preparing LPAs, as so often issues are not picked up until it is too late.