A Lasting Power of Attorney (LPA) is a legal document that allows your client (the “donor”) to appoint someone (the “attorney”) to act on their behalf if they no longer have the capacity.
An individual can appoint anyone over the age of 18 to function as an attorney should they become incapacitated through accident or illness. It can give peace of mind and also a sense of control over the expected.
There are two main types of LPA for individuals:
As well as these, there is a specific Power of Attorney to protect business owners should the worst happen.
Keep reading for three reasons why your business-owner clients need a business LPA, but first, what is it, and how does it work?
A business LPA protects an individual’s business and their loved ones
Your clients can use a business LPA to appoint a person to make decisions regarding their business, should they become unable to do so, whether through accident or illness.
A business LPA is specific to an individual, within a specific business, and can be used to cover the issues or potential scenarios the donor believes could arise in their absence.
A donor might state several key tasks that the attorney will be asked to undertake and can stipulate the limits of their decision-making power.
The aim is to keep the business running if the donor is unable to enact their duties, whether permanently or just for a short time.
Here are 3 reasons your business-owner clients need a business LPA in place
1. It puts your client in control
Building and running a business takes time, money, and commitment. And yet the diagnosis of an illness or the shock of a sudden accident can leave a company vulnerable.
By registering a business LPA through the Office of the Public Guardian, your clients will put themselves in control of their business’s future, whatever that future brings.
The decision to put an LPA in place is important. But so too is thinking carefully about exactly what it should cover.
A business LPA isn’t an “off the shelf” product. As every business is different, every business LPA will be different too. This allows your clients to dictate who is appointed and the exact tasks that the attorney is authorised to perform.
Your client can empower their chosen attorney to manage some, or all, business decisions, from managing health and safety issues and allocating a marketing budget to hiring new staff and buying or selling property.
Equally, a business LPA has the flexibility to allow a donor to prevent their attorney from making some decisions or performing certain duties.
An individual with multiple businesses can appoint multiple attorneys and be specific about the remit of each appointed person, putting the donor squarely in control.
2. They can choose someone they trust
Choosing the right attorney for a specific business might be straightforward in some cases, but it won’t always be.
An appointed attorney will need to understand the business and might even need specific qualifications to undertake tasks within it. This is why people often choose a partner or another director already working within the firm. Alternatively, your clients might opt for someone independent, such as their solicitor.
The choice will need to be based on competence rather than loyalty but will also need to be someone the donor trusts.
An attorney could be required to make tough decisions in difficult circumstances. Not only must they be capable of performing the tasks, but your client must be sure that they will act in the best interests of the business, and those of the donor themselves.
Full control over the appointment belongs to your client, so, ultimately, the choice is theirs, but we can help ensure the best decision is made.
3. It could save time and money while providing peace of mind
As of August 2021, it costs £82 to register an LPA with the Office of the Public Guardian. Without one in place, your clients will need a deputy appointed. This is done through the Court of Protection.
A deputy appointment will usually be more costly and time-consuming. This could result in a prolonged period where important business decisions can’t be made, putting your client’s business at risk.
An LPA guards against the unexpected and while no one wants to dwell on being incapacitated through accident or illness, knowing that their business is protected should the worst happen will give your clients peace of mind.
Get in touch
Protection against the unexpected is a crucial part of any long-term financial plan, but where the future of a business is also at stake, it becomes even more crucial.
If you have business-owner clients who would benefit from putting a business LPA in place, please get in touch. Email firstname.lastname@example.org or call 0116 240 7070.
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