Incapacity can have a devastating effect on the viability of a farming business, if it is the main decision-maker who becomes ill. This is particularly true if they are diagnosed with dementia or a similar mental illness. However, you can ensure your farm will continue to run smoothly if you do become ill, by setting up a financial power of attorney.
A financial lasting power of attorney allows you to appoint anyone you trust to deal with your financial affairs should you become incapable of doing so yourself. They will have access to your business bank account and have the power to pay bills, order supplies, arrange contracts, buy machinery and generally take charge of running the farm, so that it remains a viable business – an essential if you want to pass it on to the next generation.
An attorney can be a family member, a trusted associate, or both, and you can specify when and what powers each can invoke on your behalf. Powers of attorney must be set up by an appropriate legal professional and it is a good idea to also consult your financial advisor/accountant to make sure your wishes are transparent and your instructions sound.
If you don’t wish to grant a lasting power of attorney just yet, and you are still capable of decision making, you can set up an ordinary power of attorney in the meantime. This allows the attorney to act on your behalf, but with your supervision, and is a good way of keeping an eye on how they might cope with a lasting power in the future.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.