A Swansea-based firm which specialises in estate planning is warning that businesses could be at risk if their owners fall ill without having a special legal document, a Business Lasting Power of Attorney (LPA), in place.
The warning follows a case that Gorseinon based Compass Wills Writers managed, where a business owner sadly suffered a stroke that left him brain damaged. Because there was no LPA in place, all business matters had to be put on hold, having a huge knock-on effect on the business – staff pay was delayed and transactions were left uncompleted.
Previously this would not have been the case as family members or colleagues could have stepped-in to make decisions right away, but in 2013 the Mental Health (Discrimination) Act was introduced.
Now if a person loses mental capacity (ie, the ability to make their own decisions), and there is no LPA in place, an application must be made to the Office of the Public Guardian to manage their business affairs. This applies even to the wives or husbands of the person that has lost their mental capacity. It's an expensive process which can take months – meanwhile the business is left hanging.
Alyson Dyer, partner at Compass Wills and Estate Planning, said:
“Whilst many business owners may think there is an automatic right to deal with another person's affairs, there quite simply isn't. And although it's a natural hope that this kind of situation will never arise, unfortunately sometimes it does. By putting an LPA in place, any risk is minimised and a business that no doubt took a great deal of work to build, will be in safe hands.”
Wayne Dyer, also a partner at Compass Will and Estate Planning, commented:
“Applying for a business LPA is a simple process but it does need some consideration and forward planning. You need to choose someone with a knowledge of your business and someone you can trust to make the right decision, and then there are considerations such as whether you want more than one lasting power of attorney. Basically, it's never too soon to think about this!”
Compass Wills Writers has been providing expert advice to businesses and personal clients throughout the UK for 16 years, focusing on offering an affordable and personalised service that helps people protect what they've worked hard for.