Many people understand the importance of putting measures in place to deal with instances of being unable to deal with financial affairs and health matters due to losing capacity, while also giving consideration to planning for death. This can be done in the form of Lasting Powers of Attorney (LPA’s) for health and welfare, and property and financial affairs and putting a will in place to come into effect on death.
LPA’s allow you to nominate an attorney, or number of attorneys, to make decisions on your behalf if you lose capacity in the future or to assist you with physically carrying out matters for you if you are unable to due to an accident. Your will sets out who you would like to be responsible to collect in and distribute your assets and who you would like to benefit from your assets.
Planning for the future of your business
Such planning is important for your personal life but is equally important for any business interests. A business owner should consider putting measures in place for someone to be able to assist with their business if they are unable, either temporarily or permanently, to make business decisions. This could be the case if they are in an accident and are recovering in hospital and are unable to sign documents, give authority for bills to be paid or pay salaries.
This can be achieved by putting a business LPA in place, and choosing an attorney to make such decisions on your behalf in the event you are unable to make those decisions yourself. Depending on the structure of a business, consideration should be given to how a business LPA may interact with other documents relating to the business, such as a partnership agreement or articles of association for a limited company.
A business owner should also consider including provisions in their will to set out who they would like their interest in the business to pass to, as this may differ from who they would like to benefit from their personal assets for several reasons, including inheritance tax.
If the business owner is a sole director and shareholder of a limited company, consideration can also be given as to who will continue managing the business upon the business owner’s death until the estate is finalised. This may, again, be subject to other existing documents relating to the business.
Business owners have extra considerations when it comes to planning for their future, not only for their personal lives but also for their business interests. It is extremely important that you seek advice about planning to protect your business from future, unexpected, events.