Farms have often been held within a family for generations and handed down when the owner dies. That would be the case where the ownership is straight-forward. That said, farms can also have quite complex structures set up to run them. Sometimes groups of individuals or businesses form a partnership, a limited liability partnership or a limited company.
Depending on the structure, there may be clear rules as to what happens when someone becomes incapacitated and isn’t able to make decisions. We tend to think of this happening when people are older, but farming is one of the most high risk industry sectors so accidents and injuries occur more frequently.
It’s worth making sure that if you – either as a sole owner or as part of a partnership or company – are not able to make decisions for some reason, the running of your farm does not grind to a halt. If you’ve made no legal provision for this eventuality, no one will have the legal authority to automatically step in and take over.
A Lasting Power of Attorney (LPA) for property and financial affairs is the legal document that allows you to appoint your own choice of replacement to take over the running of your business. Without an LPA in place, all aspects of running your farm would be compromised, putting your business on hold for months.
There is a complex process to go through if you lose mental capacity without an LPA. This would involve those closest to you applying to the Government’s Court of Protection; in the hope of being appointed as the Court’s ‘Deputy’ to deal with your affairs. This application is a very lengthy and costly process, and there is no guarantee the applicants you would want to be appointed actually would be. If the Court decided the ‘appointees’ were not ‘suitable’, they could appoint a complete stranger to take over the running of your business.
The consequences of any delay would be potentially devastating for your business. Imagine if your suppliers and staff couldn’t be paid, or contracts couldn’t be negotiated. What about if you needed to sell the farm or were in the process of doing so?
It may be easier for a limited company to carry on, as they may have dealt with this eventuality within the Company’s ‘Articles of Association’, but that document will not represent the individual’s wishes. The only way for you to clearly express who should take over what aspects of your business is through an LPA.
LPAs are straightforward to set up, but should be professionally drafted to ensure the right appointments and provisions are included. The LPA then needs to be registered by the Office of the Public Guardian (the Court of Protection’s administrative arm) to ensure that if you were temporarily or permanently incapacitated (or even if you had to go away), your appointed Attorneys would have the authority to step into your shoes, and your business and any transactions such as a sale would not be compromised.
Isn’t it time you set up Lasting Powers of Attorney..?
Heir Tight Wills helps clients put in place robust provisions and valid documents, to protect their loved ones and their assets both during their lifetime and after their death. For a FREE Consultation to discuss writing or updating your Will & estate planning provisions, contact Rachael Rodgers on 0845 519 7585, or CONTACT US via email.
