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Why LPAs are a valuable insurance for business owners
Unexpected incapacity of a business owner can cause financial and operational difficulties for a business. It could, for example, result in no-one having authority to control the business account.
Lasting powers of attorney (LPA) can be a valuable form of insurance against temporary or permanent future incapacity. LPAs enable you to appoint one or more attorneys to step in and make decisions on your behalf if you are no longer able to do so yourself. The attorney could be a trusted friend, family member or (for a financial decisions LPA) a professional.
There are two types of LPA:
Personal welfare covers decisions such as where you live and what medical treatment you should receive.
Financial decisions covers decisions such as buying and selling property, organising insurance, opening and closing bank accounts, investing assets and dealing with tax affairs.
Whilst it may be appropriate to appoint a close friend or family member to deal with personal finances, that person may not have the best understanding of your business. Business owners therefore ought to consider making a separate financial decisions LPA.
If you lose capacity and have not made an LPA, an application to the Court of Protection may be necessary for an order appointing someone to act on your behalf. This process can be costly and time-consuming and the person appointed may not be the person you would have chosen.
If you are thinking of making a lasting power of attorney, please contact any of our lawyers in our wills, probate & trusts department.
Rachel Taylor is a solicitor in our wills, probate & trusts team. She handles all private client matters, with a particular interest in mental capacity issues.