The importance of a Power of Attorney (Business)

11th August 2017
The importance of a Power of Attorney (Business) image

Importance of a Power of Attorney in Business

A Lasting Power of Attorney (LPA) is a legal document that enables one person (the Donor) to appoint a maximum of four other people (the Attorneys) to act on their behalf when they require assistance.

There are two types of LPA available- one relating to property and financial affairs and one relating to health and welfare decisions. 

For further information as to what an LPA is and the difference between the two types of LPA please see our leaflet/article titled “Should I make a Lasting Power of Attorney?”

Many people associate LPAs with those who are incapacitated and the elderly as they are often incredibly important for those, for example, suffering from dementia so that their affairs can be managed on their behalf. However, if you are a sole trader, a director of a company or in a partnership an LPA could prove very useful in situations where you are unable to make your own decisions. It is possible that a partnership agreement or articles of association make provision for a situation where a partner or director loses capacity and therefore the terms should be checked to ensure that any LPA does not conflict.

Although a lack of mental capacity is often associated with the elderly, sadly the situation can  arise for those who are much younger, whether that be from a medical condition or from some form of accident. Aside from mental capacity, there may be a physical reason why you would be unable to make decisions regarding your business or deal wth certain business matters such as if you were out of the country. In these situations it would be imperative that your business can continue to run smoothly with minimal disruption, whether that be the payment of bills and salaries, dealing with the bank with regard to any loans, dealing with insurers, dealing with tax matters or ensuring that any important contracts are not compromised for example.

Although the LPA can be used as soon as it has been registered, you do have the option of ensuring that it is only useable if you no longer have capacity. This may be useful if, for example, you are out of the country for some time but still intend to make decisions with regard to your business.

It is possible that you may want different people to deal with your business affairs to your personal affairs. If this is the case then it is possible to create two LPAs- one dealing with your personal affairs and a separate LPA to deal with your business affairs. If this is the case then it is important to include specific instructions in your LPAs detailing which attorneys have the power to deal with which assets. This is important so that, for example, your business Attorneys cannot make decisions with regard to your personal affairs or vice versa. Alternatively, you may only need to create one LPA that deals with both your business and personal affairs if you are happy for the same people to act in relation to both aspects. 

When choosing your Attorneys, you must carefully consider whether they would be suitable for the role and that they understand what their responsibilities would be including any other matters that should be considered such as additional insurances or any other requirements depending on the type of your business.

Upon your retirement, for example, or if the relationship between you and your Attorneys breaks down then it is always possible to revoke an LPA provided you have the necessary capacity to revoke it.

If any of the situations mentioned above occurred and you did not have an LPA in place, an application could be made to the Court of Protection for a Deputyship Order but this is much more expensive than an LPA and can take a number of months to finalise which is likely to be disruptive to your business. In addition, you would not be able to choose the person appointed as Deputy- the Court of Protection would choose and this may not be someone you would have chosen yourself.

When setting up a new business, there are many different matters that need to be considered and it is likely that creating an LPA for your business affairs was or is probably not at the top of your list of priorities. However, circumstances can arise whereby you may be unable to make decisions with regard to your business or continue to deal with business matters whether long term or short term and, in such cases, it is important that your business can continue to run effectively and smoothly by having a suitable person appointed as your Attorney.

To discuss Lasting Powers of Attorney, please contact one of our lawyers in the Wills, Powers of Attorney and Probate Department:-

Jamie Dobbs- jamie.dobbs@maplessolicitors.com

Jane Mawer- jane.mawer@maplessolicitors.com

Faye Blair- faye.blair@maplessolcitors.com

Or telephone the office 01775 722261 and ask to speak with one of the team.


Property Protection Trusts image

Property Protection Trusts

Property Protection Trusts and Protecting your Property from Care Home Fees

Many people are concerned that as they get older, they may need to move into a care home and the cost of such care can be very expensive. Many people are therefore looking for ways to protect their assets from care home fees.

In recent years “Property Protection Trusts” have been promoted as being the failsafe, guaranteed way of protecting your property from care home fees. Many companies promoting such trusts are unregulated and their products such as Property Protection Trusts are being promoted and sold by sometimes nothing more than a very persuasive salesperson.

It is likely that your home is your largest asset and you should be very cautious before making any decisions with regard to your largest asset and the roof over your head. Indeed a Property Protection Trust may not even protect your home from being sold to pay for care fees or could cause tax implications and therefore it is very important that you take advice from one of our lawyers before making any decisions with regard to such Property Protection Trusts.

These Trusts can be brought to people’s attention either from cold calling, arranging home visits and sometimes even from kiosks or stalls in public areas. The people “selling” Property Protection Trusts to you can be very persuasive and may not be providing you with correct information or all of the information you should have before making a decision regarding your property. Their fees are often excessive.

In some cases, these companies even offer Lasting Powers of Attorney at what they claim to be a reduced rate. People should take caution as these “cheap” Lasting Powers of Attorney often result in being more expensive than our own charges and the companies involved often do not provide the correct advice or the necessary advice for you.

If you have been contacted by someone discussing Property Protection Trusts and would like to discuss this further with one of the lawyers in the Wills and Probate Department of this firm or you have already created a Property Protection Trust but would like to take further advice then please contact one of our lawyers in the Wills and Probate Department:-

Jane Mawer- jane.mawer@maplessolicitors.com
Jamie Dobbs- jamie.dobbs@maplessolicitors.com
Faye Blair- faye.blair@maplessolcitors.com

Or telephone the office 01775 722261 and ask to speak with one of the team.

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