Naming someone to take care of your finances in the event of incapacitating illness or injury, ensures you retain control of your business and can save substantial legal fees.
A lasting power of attorney (LPA) is a legal document that lets you choose people you trust to make financial or health and care decisions on your behalf. An LPA can be used only after it is registered, and there are two different types.
Property and financial affairs which covers management of investments, income, paying of bills and applying for benefits as well as purchase and sale of property.
Health and welfare can only be used when mental capacity has been lost. You can give authority for your chosen attorney to make decisions over life sustaining treatment as well as care packages, living arrangements and treatments.
If you lose mental capacity, you are at risk of losing control of your business, as a court will likely appoint a fee-charging professional, known as a deputy, to run your affairs. If you are in a partnership or own a company, do not assume anyone can manage the business in your place, as nobody has an automatic legal right to manage another’s business affairs, whether a spouse, business associate or a partner.
So, while it is a huge amount of power to be handing over to someone else, the advantage of doing it in advance is that you can explain clearly your wishes and make sure you have chosen the right person to help. You should only appoint someone you trust and who has the right skill set to help you and your business.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.