Modernising Lasting Powers of Attorney

The Ministry of Justice (MoJ) and the Office of the Public Guardian (OPG) jointly initiated a project to modernise the process of making and registering lasting powers of attorney (LPAs) in England and Wales in November 2020. STEP was invited to sit on the Modernising Lasting Powers of Attorney (MLPA) stakeholder working group and has attended various workshops over the past six months to help shape and develop the consultation.

The consultation deadline recently passed on 13 October and STEP has submitted a formal response. The consultation seeks views on seven specific proposals that the government is considering and a summary follows below of STEP’s response to each proposal.

Proposal one: ‘Role of witness‘, considers the role and value of witnesses and how to keep that value.

The OPG proposes to remove the need for a witness and/or replace the witness with new safeguards that perform the same function. STEP strongly opposes the suggestion that the protection provided by witnesses offers little or no value to the process. LPAs should retain their status and safeguard as a legal deed with the requisite formalities, and all signatures should be witnessed by independent witnesses.

Proposal two: ‘Role of application’, considers the role of applying to register an LPA and who can apply.

We agree that there are benefits to the proposal to digitally check the registrations, particularly in reducing the chance of delay and rejection. We also feel strongly that a paper version and application process should remain available to the elderly or vulnerable who have no internet access or IT facilities. We stress that even if ID verification online is technologically robust, there will be a small demographic, usually the more elderly, that do not have access to a computer or smartphone for verification.

Proposal three: ‘OPG remit’, considers the OPG’s remit and examines how to widen it so that it can verify people’s identity and stop or delay an LPA’s registration if it has concerns about it.

We agree that there need to be more advanced identity checks for donors, which would consequently improve safeguards and reduce the chance of identity fraud and theft. We suggest that the OPG should require suitable identification for all parties to the LPA including passport details and address confirmation. We also advise that indemnity bond insurance, subject to a minimum value set at a relatively low amount by the OPG, should be in place for all attorneys in case of malfeasance, fraud or similar wrongdoing.

Proposal four: ‘How to object’, considers how people can object to an LPA and how to simplify the current process so people can more easily understand where to send objections and how to do so.

We agree with the proposal that anyone should be able to object to an LPA at any time. However, we have suggested that this course of action should be aligned with a signposting and public awareness campaign detailing the limits of attorneys’ powers.

Proposal five: ‘When to object’, considers when people can object and examines at what point and for how long objections can be made before an LPA is registered.

We suggest that the time should be shortened between an LPA being sent for registration and it being placed on the register. We propose that a two-week waiting period plus one week for processing would be appropriate with a total four-week deadline for an online or paper return.

Proposal six: ‘Speed of service’, considers the speed of the LPA service and whether a dedicated faster service should be introduced for people who need an LPA urgently.

We believe that an urgent service would provide additional benefits. If the service is implemented we suggest that the specific reason for the urgency should be shown, with a limited tick-box menu, and the requisite proof should be required by the OPG. However, we reinforce that if the overall registration period is reduced (proposal five) then the number of cases where urgent service would be required would be very low.

Proposal seven: ‘Solicitor access to the service’, considers solicitors’ access to the service.

The online service is welcomed, subject to the retained safeguards. However, the current inability to save the online deed to the relevant client file is a significant disadvantage to this system, and this needs to be addressed before this procedure becomes compulsory for practitioners. We understand that this service will be accessible by other professionals (not just solicitors), such as estate planners, will writers, charities, etc., which is important.

We also recommend that dropdown menus are included in the online deeds, including precedent clauses with wording approved by the OPG and the relevant expert professional bodies, to cover matters such as continuing to be able to use or to set up an investment management arrangement with a discretionary fund manager. This would benefit all, including lay applicants. STEP has also reinforced that it is essential that any new online system is securely piloted within the industry before it is implemented.

STEP’s full response to the consultation can be found here. We will keep members apprised of any further developments in this area.

Emily Deane TEP Technical Counsel


Are you a client of Universal Wealth Preservation?

STEP has received an unprecedented number of enquiries regarding Mr Steven Long and the companies of which he is a Director, namely Universal Tax Solutions of Dencora House, 34 White House Road, Ipswich, Suffolk, IP1 5LT, which traded as Universal Wealth Preservation. Associated companies include Universal Asset Protection Ltd and Universal Trustees Ltd.

Mr Steven Long, Mrs Melanie Long and Universal Trustees Ltd act as Professional Trustees. Universal assisted clients with drafting and managing trusts, wills and lasting powers of attorney (LPAs), as well as providing secure storage of original documents.

STEP suspended Mr Long’s membership on 1 November 2017, and he was permanently excluded on 5 October 2018, following the completion of the disciplinary investigation into a number of the complaints received (updated 5 November 2018).

Universal Asset Protection entered into compulsory liquidation in May 2018, with the business premises of Universal Wealth Preservation having closed several months previously. We do not know nor can we speculate why the business ceased trading.

Clients contacted STEP after they experienced great difficulties in contacting Universal, with no responses to emails, letters or phone calls.

We have been advised by clients that they have been concerned about the management of their trusts, with delays in estate administration and payments from the trusts being made, in addition to being unable to ascertain the whereabouts of their assets, or retrieve original wills and LPAs held in secure storage.

Universal clients now face the realistic prospect that they are unlikely to retrieve original documents or to recover cash assets.

STEP is aware that Suffolk Constabulary is now investigating, and it has seized all documents that were held at Dencora House.

We understand from media reports that Steven Long was sentenced to a prison term for contempt of court for refusing to disclose the whereabouts of client assets. This is a civil matter and is not related to the investigation by the Eastern Region Special Operations unit. We understand that criminal investigations are still underway.

What should you do now?

STEP is advising Universal clients to:

  • Seek independent legal advice from an experienced trust and estate practitioner on your options, which may include how to make an application to the courts to replace Mr and Mrs Long/Universal Asset Protection Ltd as trustees, making new wills and LPAs
  • Check whether Lasting or Enduring Powers of Attorney have been registered with the Office of the Public Guardian – call the OPG on 0300 456 0300
  • If not in possession of an original will, make a new one without delay. In situations where someone has already passed away, we understand that Probate Registries are aware of the situation with Universal and registrars will accept a Rule 54 application for a copy of the will to be used. In circumstances where the Universal directors are appointed as executors, registrars will accept a Section 116 application to appoint new executors.
  • Contact the Land Registry to ascertain in whose name your property is registered. Call the Land Registry on 0300 006 0411. We understand that the Land Registry is aware of the issues with Universal.
  • If appropriate, consider whether to make a report to Action Fraud quoting ‘Operation Ardent’
  • Many clients will require Universal Trustees Ltd to sign forms that release them as trustees. In such circumstances, clients’ legal representatives (solicitors and barristers) only can submit a written request for up-to-date contact details to be released to them. Such requests should be made via [email protected].
  • If concerned by marketing information received or direct approaches from other firms advising you to use their services, consider taking advice from Trading Standards/Citizens Advice Bureau.

You can find a full Q&A on Universal here.

Please also see our article on what to look for when choosing a trustee.

If you have any queries, please contact sta[email protected]

Sarah Manuel is Professional Standards Manager at STEP

Invitation to members – LPA discretionary investment clauses

Emily DeaneThe England & Wales Office of the Public Guardian (OPG) published an update in September 2015 providing guidance on financial lasting powers of attorney (LPAs) and how attorneys can delegate investment management decisions to a discretionary investment manager.

Under this guidance an attorney can appoint a bank or an IFA to act on their behalf to make investment decisions; however specific wording must be incorporated into the LPA. Since the guidance was issued in 2015, STEP and other professional bodies have contacted the OPG with their concerns.

The primary issue is that if an attorney is currently using a discretionary manager without explicit permission in the LPA, then they need to apply to the Court of Protection to obtain retrospective consent.

The suggested wording within the LPA can be similar to the following, ‘My attorney(s) may transfer my investments into a discretionary management scheme. Or, if I already had investments in a discretionary management scheme before I lost capacity to make financial decisions, I want the scheme to continue. I understand in both cases that managers of the scheme will make investment decisions and my investments will be held in their names or the names of their nominees’.

Tell us your views

STEP would like to invite members to provide examples of how the OPG guidance may be difficult to apply in practice, so that we can present a test case to the OPG and underline that the impact of this issue is potentially far-reaching.

Issues that have arisen include:

  • There is no guarantee that your bank or IFA will accept this wording, and you may need to confirm their agreement in writing before the LPA is registered.
  • HSBC has specific wording that it will not stray from, while other fund managers are willing to continue acting without the delegation clause. Other banks and IFAs may switch to the stringent guidelines in future.
  • You can re-do the LPA where the donor still has capacity, but this option may not be well received by the client, and is time consuming and costly.
  • If the LPA has already been registered without the express wording, the attorney can apply to the Court of Protection for the retrospective authority to appoint an investment manager.

This is also time consuming and costly.

If you are currently acting as an attorney and you have already delegated investment making decisions, there are some options available to you:

  • You could change your discretionary manager to an advisory manager so that you are still ultimately making the decisions, although you should check any potential liability issues that may arise.
  • You could speak to your discretionary manager about the firm’s policy and what their requirements are.
  • You could re-do the LPA where the donor still has capacity, or alternatively apply to the Court of Protection when the existing discretionary manager is not willing to continue/or start acting in accordance with the OPG guidance.

However, it might be prudent to wait and see whether the OPG will consider amending its guidance before taking any action. Currently, the OPG feels discretionary investment management accounts for a tiny percentage of registered Powers of Attorney, so the number of Attorneys affected is relatively small.

STEP is hopeful that by providing the OPG with a test case of practical working examples, then it might recognise and review the difficulties that attorneys and their advisors are facing in this connection.

The best case scenario would be the determination that the delegation of investment management by an attorney to a discretionary investment manager is already legally permissible, without the need to retrospectively apply for it through the court.

STEP will provide an update when further information is available.

We would very much value your input. Please send your examples to [email protected] by 31 October.

Emily Deane TEP, STEP Technical Counsel

The OPG: How solicitor deputies should manage deputyship accounts

Emily Deane, Technical Counsel at STEPThe Office of the Public Guardian in England and Wales published a practice note on 15 February 2016 (below) clarifying how solicitor deputies should manage deputyship funds. Whilst the information is widely understood as best practice, it is a helpful reminder regarding the administration and management of deputyship accounts.

The law states that all deputies should keep their clients’ money and property entirely separate from anyone else’s, and that includes solicitors’ client accounts. The Solicitors Regulation Authority and Mental Capacity Act Code of Practice also uphold that funds should not be combined with other people’s. This is to circumvent client funds being used fraudulently or for money laundering purposes.

The direct advice from the OPG is stated at Standard 1a(9), ‘Open a deputyship account in the client’s name with the deputy named as such on the account. Ensure that all funds held for the client are held in accounts and/or investments in their name and kept separate from the funds of the deputy or other parties.’

The exception to this rule is during the initial period, when you are setting up a client’s separate deputyship account, and in this provisional period you may hold their funds in a general client account as a temporary measure. The MCA Code of Practice advises that there would have to be a very good reason for mixing the funds with other clients other than during the initial administration stage. The funds should be segregated at all other times.

The OPG offers comprehensive guidance in its guide SD3 How to be a deputy; the basic message being that you should get to know your client as well as you can, so that you can act in their best interests. If your client is seriously incapacitated you should find out more about them through their friends and family. The decisions that you make about their finances should be in line with the nature of their existing investments and the size of their estate.

The OPG advises deputies, ‘There will be cases where large balances in a client account will not represent the best investment strategy for a client. In these cases the OPG will question the appropriateness of keeping significant excess funds in this way.’

STEP recommends that if the client no longer has mental capacity, you need to take into consideration the financial decisions that they made when they did have capacity, and if they have lucid moments, discuss their financial wishes at that time.

The practice note reinforces the principle that solicitors acting as deputies should be managing their clients’ funds ’with the best interests of their client in mind,’ at all times.

Emily Deane TEP is Technical Counsel at STEP