When the thing you dread the most happens…
We all have a healthy belief that bad things might not happen to us, but sadly there are no guarantees and we have been witness to tragedies which have resulted in the need for a practice to be sold (usually as a result of an accident or illness) leaving the principal unable to function normally. On these occasions the family members do not only have to deal with emotional fallout from such a tragedy but also the financial impact.
In view of this, we encourage all our principals to make sure they have a Lasting Power of Attorney (LPA), a legal document which enables you to plan ahead and set up now what you would like to happen should you become incapable of managing your affairs in the future. In an LPA, you appoint one or more ‘attorneys’ who will be able to make decisions on your behalf. An attorney can be anyone over the age of 18 who is not bankrupt. Your attorneys have a duty to act in your best interest, but it is important that you trust them.
Why should I do this now?
As we know, accidents and illness can happen at any time. If you suffered from a stroke, or a brain injury following an accident, then everyday tasks such as managing your accounts, paying your bills and maintaining your practice could become very difficult or even impossible. An LPA ensures you can be sure that people you trust can manage your affairs and make decisions on your behalf.
You can only make an LPA whilst you have capacity to understand the nature and scope of the LPA, so it is not something you should leave to do one day!
What happens if you have not made an LPA?
So should you lose capacity and do not have a valid LPA then it may become necessary for an application to the Court of Protection for a Deputy to be appointed. This may result in someone managing your affairs who you would not have chosen had you had capacity. The Court could even appoint a professional Deputy (usually a solicitor) if it considers this to be appropriate, for example if there is a family dispute. Such application to Court is very time consuming and costly and it may be several months before your Deputy is able to access your finances.
The sad reality is there is the potential to lose everything you have worked for, not to mention that it can be a very stressful time for your relatives who may end up spending their own money trying to pay your bills and sometimes having to resort to banks as they try to secure loans to keep businesses going and not always succeeding.
Every time we are instructed to sell a practice we check if the principal has an LPA in place, and if not, because we believe how important they are, we actually cover the cost to put one in place.