The use of Lasting Powers of Attorney (LPAs) – where an ‘Attorney’ is appointed to make decisions on your behalf should you become unable to make them yourself – has increased significantly in recent years.
However, it would be a mistake to view LPAs as purely a tool for individual use. A business LPA is vital if you run your own company, whether you run it alone or in partnership with others – who should also make them.
What would happen if you were injured or fell seriously ill? Who would take over the running of the company? Who would be in charge of those strategic decisions on which the future of the business will depend?
While there may be some form of informal understanding among you and your senior team of who would take on that responsibility, that isn’t actually enough. Without the legal structure of a Lasting Power of Attorney in place, there would be issues with them accessing the business’s bank accounts, arranging contracts with suppliers, even paying the salaries of the existing staff. It may not take long for the company to end up in serious difficulties.
Writing a business LPA is an essential tool to enable the smooth continuity of the company, ensuring that an appointed Attorney is in place to step in and maintain ‘business-as-usual’ should you no longer be able to fill that role.
Picking a suitable Attorney for a business LPA is not altogether different to selecting one for a personal LPA – but you spouse or adult children may not be the ideal appointees. You need to find someone who you trust, who is reliable, and who has a similar outlook and attitude towards the business as you. It’s vital that you talk this responsibility through with them in advance though, so they are well aware of what will be expected of them should you fall ill or be involved in an accident.
As with a personal LPA, you can appoint more than one Attorney, and can specify whether they should act together in certain areas but could act separately in others.
Successful business owners pride themselves on being prepared for all situations, and sadly ill health is an important one to consider. Without making it clear legally that one of your team can step in and make important business decisions on your behalf if you are no longer able to, it can put the very future of your firm in danger. As a result, having a business LPA in place is vital.
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.