As a business owner, it is crucial to have a plan in place to ensure that your affairs are managed effectively and efficiently if you become incapacitated or unable to make decisions. One essential document to consider is a Lasting Power of Attorney (LPA). In this article, we will explore the importance of LPAs for business owners and how they can help protect your business interests.
An LPA is a legal document that allows an appointed individual(s) (known as an attorney(s)) to make decisions on your behalf if you become unable to do so. There are two types: a property and financial affairs LPA and a health and welfare LPA. The former covers decisions about your business interests, including financial decisions, while the latter covers decisions about your personal welfare, such as medical treatment.
As a business owner, your interests may be more complex than those of the average person. If you were to become incapacitated, the consequences for your business could be significant. By creating an LPA, you can ensure that someone you trust and who understands your business interests can make decisions on your behalf.
An LPA for financial affairs can be particularly important for business owners. It allows your appointed attorney(s) to manage your finances, including any business accounts, pay bills, and make investment decisions. This helps ensure that your business continues to operate smoothly, even if you are unable to make decisions yourself.
If you were to become incapacitated without an LPA in place, it could lead to disputes among family members or business associates about who should make decisions for you. An LPA can help to avoid these disputes by appointing attorneys, giving your family members peace of mind that your affairs are being managed appropriately.
LPAs can be tailored to suit your specific needs and requirements as a business owner. You can appoint one or more attorneys, set out specific instructions about how your affairs should be managed, and include any limitations or restrictions you want to impose. This flexibility ensures that your business interests are protected and managed in a way that aligns with your wishes.
Unfortunately, there is always a risk of fraud or mismanagement when it comes to managing finances, and this risk can increase if you are incapacitated. By appointing an attorney through an LPA, you can reduce these risks. Your attorney have a legal duty to act in your best interests and manage your affairs appropriately.
LPAs can ensure the continuity of your business in the event of your incapacity. Without LPAs, your business could be left in limbo, with no one able to make decisions or manage affairs effectively. This could lead to significant financial losses, loss of customer reputation or even the collapse of the business. With LPAs in place, you can ensure that your business continues to operate smoothly, protecting your employees, customers, and other stakeholders.
In conclusion, as a business owner, it is essential to consider the importance of LPAs in protecting your business interests. They provide flexibility, reduce the risk of fraud or mismanagement, and ensure the continuity of your business in the event of your incapacity. By working with an experienced lawyer, you can create LPAs that align with your specific needs and requirements, giving you peace of mind that your affairs are in safe hands.
First published in the July/August 2023 issue