it explains why as business owners we need to put provision in place to make sure our businesses can continue should we loose mental capacity. Call me to discuss in more detail.
Linda Cummins, head of wills at legal firm Goldsmith Williams, explains that company owners should make arrangements to ensure their business continues to operate in the event that they become incapacitated.
If there are no plans in place for someone to have the legal authority to sign cheques and oversee the running of the business, there is every possibility that by the time the Court appoints someone to run it on behalf of an incapacitated owner-manager, the business will failed.
A lasting power of attorney, often referred to as an LPA, is a legal document that enables a selected person, or persons, to take over the day-to-day running of a business should the owner be either mentally or physically unable to do it themselves.
A common mistake many people make is to assume that because they have a will, everything is in order. In fact, a will only takes effect on death; it has no bearing on your business if you lose the capacity to run it but are still very much alive.
Accidents and illnesses that leave people incapacitated or hospitalised for extended periods can strike at any time and any age. According to the Department of Transport Road Casualties Annual Report, 22,660 people were seriously injured in road traffic accidents in 2010.
Over 130,000 people in England and Wales suffer a stroke each year, with around 10 per cent of those being under retirement age. One person in every 500 has Parkinson’s and, of those diagnosed, one in 20 is under the age of 40, while more than 16,000 younger people in the UK are living with dementia.
A lack of knowledge or "ostrich syndrome" is putting businesses at risk of being left in limbo or going under. People tend to think things like this will never happen to them or they have to be old before they suffer a debilitating illness, but "thirty somethings" are no more immune to injury or illness than the rest of us.
And it’s not just the business that will be affected either. The family of the company owner will be left unable to access funds to live off, adding considerable financial worry at an already very distressing situation.
By Linda Cummins
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