A Will with "Guidance". Problems?

securityguy

Linton wrote: »

I dont believe this is true. The courts have decided that a donor cannot instruct the Attorney to carry out activities that are outside the scope of the authority of an attorney. This scope is to act in the interests of the donor. That is the over-riding criterion for anything the Attorney considers doing.

OK, so assume what you say is true (I don't believe it is: for example, powers of attorney can exclude the power to sell specified items of property, even if the sale of that property would be manifestly in the interests of the now-incapable donor, but let that pass).

Suppose a donor has some assets, an instruction from the donor as to the order to sell them in, and has a will whose contents the attorney does not know. Are you saying that the attorney cannot simply follow the instructions the donor left? What should they do: flip a coin? What happens if they flip a coin and it happens to agree with the instructions?

securityguy

Yorkshireman99 wrote: »

You are very wide of the mark. The Office of the Public Guardian do not expect attornies to do this sort of thing. I suggest you ask the OPG if your scheme is permitted.

What "sort of thing"? It is likely I will have to administer my parents' assets at some point. They are _complex_: lots of investments of varying returns, liquidity and term. I am going to have to make choices as to what order to liquidate assets in. What are you saying I cannot do? What are you saying the OPG does not expect me to do (for the avoidance of doubt, I do not know the contents of my parents' will).

securityguy

Malthusian wrote: »

Ah but it's more complicated than that, which is why I said there would be sound economic reasons for both.

Premium Bonds actually pay 1.15% interest on average, not 0%, but the nature of the prize draw means that you are very likely to get 0..

If you hold 50 grand's worth, which as I recall is the maximum, it's highly unlikely the return will be zero: the more you hold, the more the return will converge on 1.15%. And 1.15% of £50 000 is £575 pounds, which is a substantial part of the £1000 interest disregard for a standard rate tax payer and more than the disregard for a higher rate tax payer, so for them the effective rate of interest is substantially higher. As someone who is retired and a higher rate tax payer is likely to have other investments, the effective interest rate is about 1.9%.

And, as you say, you can argue the risk/return balance in varying ways depending on the precise circumstances of the donor, and that's _exactly_ what attorneys can and should be doing. I'm not quite sure how YM99 thinks that investment decisions for donors get made, but it is certainly not a requirement that attorneys operate via a financial advisor, only that they use reasonable skill and diligence.

Yorkshireman99

securityguy wrote: »

What "sort of thing"? It is likely I will have to administer my parents' assets at some point. They are _complex_: lots of investments of varying returns, liquidity and term. I am going to have to make choices as to what order to liquidate assets in. What are you saying I cannot do? What are you saying the OPG does not expect me to do (for the avoidance of doubt, I do not know the contents of my parents' will).

I refer you to the artilces in posts #29 & #31. As you will see the OPG and the Courts are quite strict on what can and can't be done by an attorney. The articles suggest a very cautious approach is required and not the carte blanche you think attornies have.

securityguy

YM, neither of those documents are relevant to how attorneys decide which assets they are going to use in which order once the PoA is active. I'm well aware of the guidance for making valid PoAs, having been involved in the drafting of quit a few. You still aren't answering the basic question: "if a donor has multiple assets, what criteria should, and can, the attorney use to select the order to liquidate them?"

Yorkshireman99

The OPG says that the attorney must act in the interets of the donor. The problem is, as I see it, that attornies are in an invidious postition. IMHO the whole LPOA system is a mess and I would be very reluctant to be an attorney now because the risks of being accused of acting wrongly are too great.

Geoff1963

I've seen "deceased" announcements which say, "No flowers. Donations please to charity X" ; inheritors could be asked to do the same. I think that if the charity actually gets mentioned in a will, that allows them to challenge the amount ; which could be awkward all round.

It would also allow the family to override our wishes if one or more of them was in real need of the money. Family comes first.

What if the "real need" occurs just after the money is given away to charity ? Maybe you need to set up a trust fund, with someone deciding "real need" cases ( to get or be loaned ) , and say 10 % of any surplus at the end of each year going to the charity.

securityguy

Yorkshireman99 wrote: »

The OPG says that the attorney must act in the interets of the donor. The problem is, as I see it, that attornies are in an invidious postition. IMHO the whole LPOA system is a mess and I would be very reluctant to be an attorney now because the risks of being accused of acting wrongly are too great.

But back in the real world, most powers of attorney proceed unexceptionally. Part of that, as we have discussed on many occasions, is that there is no effective oversight: it's hard to find out what's happening before the donor dies (annual accounts are required for deputyships arranged through the court of protection, but not required in any useful sense of the word for standard powers of attorney) and there's very limited powers to audit them post portem.

But most attorneys are decent and honest, and do the job to the best of their abilities. Those abilities might not be very good but, to be blunt, usually the attorney is no less capable than the donor was, even before their loss of capacity, so the donor is probably not subject to decisions worse than those they would have made themselves. And in the usual situation which covers the vast majority of cases the attorney is a residual beneficiary, which means that the scope and incentive for malpractice is lessened (people who steal money from their parents in gross ways don't trouble themselves to get powers of attorney, they do all that hooky stuff with shared PINs and third-party mandates).

Creating some huge storm of subtle "ah, you can't do this obvious thing for less than obvious reason" helps no-one: honest attorneys should be given a fair amount of latitude to do what is usually a thankless task, and dishonest attorneys aren't too bothered about fine nuances of the law as they are ignoring it anyway.

Most powers of attorney are executed in favour of diligent and honest children of the donor who make the best of a difficult situation. The number that go wrong is small, and the reasons they go wrong run wider and deeper than the powers of attorney.

Yorkshireman99

What evidence, as opposed to opinion, have you that LPOAs, are not widely abused? We hear on this forum every week of unscrupulous relatives plundering vulnerable relatives assets. I will answer my own question by saying nobody knows just how widespread "family" fraud is. It must range from the petty to theft of thousbpnds and even properties. Your assertion about the vast majority of attorneys being residuary beneficiaries is pure fantasy.

getmore4less

securityguy wrote: »

But back in the real world, most powers of attorney proceed unexceptionally. Part of that, as we have discussed on many occasions, is that there is no effective oversight: ........

The primary assumption for LPA is the doner chooses wisely someone they trust there is plenty of guidance and the statutory framework effectively vets the LPA for legal correctness, including any preferences and instructions.

It's the same for many things including selection of executor and Guardians, the assumption is the person best placed to decide who should administer their estate and look after any children is themselves

The LPA allows for a doner to set up their own oversight options like have annual account audited by a 3rd party.

The basic framework for LPA comes from the Mental Capacity Act anyone acting(or thinking about it) should be familiar with the code of practice.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/497253/Mental-capacity-act-code-of-practice.pdf