ADVICE
SOMETIMES ALL YOU NEED IS A BIT OF
WILL POWER
It is difficult to find the time to get admin in order . That said , I am instructed far too often to handle problems which could have been avoided , or at the very least mitigated , had time been taken to put appropriate legal documentation into place . Questions worth considering are :
Q : Why should I have a will ? The reasons are endless . If you do not have one , the rules of intestacy apply , being a prescribed list as to who receives what . There can be disastrous consequences , in that your hard-earned assets , and business interests , could pass to someone you never intended .
Furthermore , if you are in an unmarried partnership , your partner is not entitled to anything and would have to take urgent legal advice to seek a resolution with the individual ( s ) entitled under intestacy .
If that is not possible , then your partner may have to start court proceedings for financial provision , which is time-consuming , stressful and expensive .
What happens to a business on death depends upon its structure i . e . unincorporated sole trader , partnership , LLP or company . Whatever the structure , the best approach is to remove all doubt by instructing a solicitor to prepare a will that factors in what you would like to happen .
It is also vital to take the time to discuss worst-case scenarios with your fellow partners / shareholders and agree the ideal outcome .
Naturally , you will want to pass on the value of the business to your dependants , but for them to become a shareholder in the business may be inappropriate .
To this end , having a shareholders ’ agreement or partnership agreement in place can be worth its weight in gold .
If a shareholder / partner unexpectedly dies , it can provide for existing shareholder ( s )/ partner ( s ) to purchase his / her shares , with the proceeds passing to the beneficiaries in his / her will .
By having both a will and a shareholders ’ agreement / partnership agreement in place , your loved ones benefit financially and business continues as usual .
Q : Why should I have a Lasting Power of Attorney ? A : LPAs are documents whereby you legally appoint one or more persons , known as attorneys , to deal with your affairs when you are no longer mentally capable of doing so , perhaps because of a medical emergency .
LPAs can easily avoid a financial crisis by authorising your attorneys to access bank accounts , for example . Some think that their ‘ next of kin ’ can automatically deal with their financial matters in these circumstances ; the reality is that ‘ next of kin ’ is not a recognised legal concept .
They will be refused access to your finances , whether personal or businessrelated , which can have dire consequences for you and your business .
You can have more than one LPA for finances . This is particularly useful where you feel that the people who would manage your personal financial affairs may not be wellsuited to managing your business .
This is especially relevant to those who are unincorporated sole traders or in a partnership . You can have two separate financial LPAs , one for your personal finances and the other for your business finances , appointing different people .
It is important that the two do not overlap , so taking specialised legal advice is essential to avoid a dispute .
Q : What should I do ? A : Approach a solicitor who specialises in wills and LPAs and tell them what keeps you up at night !
Problems arise either from people not having wills and LPAs in place , or by making their own .
Do not be tempted to save a few pounds with DIY … professionally prepared wills and LPAs will be the best money you have ever spent when the times comes that you need them .
Stephen Robinson Associate Solicitor , Jacksons Law Firm jacksons-law . com
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