A recent article in the Daily Telegraph highlighted the importance of an often overlooked, document, the Lasting Power of Attorney, or LPA. LPAs are invaluable in situations where someone becomes unable to look after their own affairs.
Not just for the Elderly
By far the most common reason given for individuals taking out an LPA is in case of dementia in later life. The “in case I lose my marbles” scenario. However, LPAs are not just for the elderly, they are an important legal tool and powerful document, which can prove crucial during difficult times. This particularly relates to businesses.
Businesses – cash flow is king
Take, for instance, a sole trader. If a sole trader is incapacitated, how will the business continue if he or she remains so? Who will pay the invoices? Who will sign new contracts? A Deputyship order can be made to the Court of Protection, but this will take, at best, 6 to 9 months to complete. The business could have collapsed long before a Deputy is appointed.
What about small partnerships? With many partnerships the banking mandate often contains a restriction that payments in excess of a certain amount require two signatures. What happens if one of those signatories is incapacitated? Who will pay the staff and suppliers?
There are many other examples, both from the business world and for personal clients, where the existence of an LPA could save considerable sums of money, time and heart ache. They are like insurance policies, you hope you don’t have to use them, but it causes considerable pain to those around you if you do not have one.
Act now – to protect for the future
By putting an LPA in place you can decide in advance who you would like to deal with your business affairs should you become incapacitated or be out of the country for an extended period of time. An LPA can cover your business and personal affairs or can be restricted to just your business affairs (Business LPA). Many clients prefer to separate their business dealings from their private matters. This can be achieved by appointing a trusted business associate as an attorney for your business, under a Business LPA and a spouse under an LPA (Property & Affairs) to deal with all other financial aspects.
I have yet to find a reason why anyone should not take out an LPA. So ensure you make it part of your personal and business continuity plan.
If you require any further information on this, then please do not hesitate to contact Sue Adams, a Solicitor, Partner and Head of the Private Client team specialising in Wills, Lasting Powers of Attoney and Grants of Probate on 01202 204561 or alternatively at [email protected].
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