Damian Lines from Rubin Lewis O’Brien recently spoke at an online networking event we held, and had some great advice for us all regarding Wills and Lasting Powers of Attorney. Here is what he had to say:
Thanks for an enjoyable meeting via Zoom this morning. I must say, it was the first time that I have given this sort of presentation without being in the same room as the other attendees. Just to tell you a little about myself …
I am both a solicitor and a full member of the Society of Trust and Estate Practitioners (STEP) which is a worldwide organisation of highly qualified practitioners, and I am therefore able to provide holistic advice taking into account your specific requirements, and those of beneficiaries etc.
I am a Mencap recommended solicitor, and I have had the privilege of delivering their annual ‘planning for the future’ seminars for several years now. I am also pleased to have given seminars for Carers Wales (the welsh arm of Carers UK) and will be doing so again (virtually) next week. Visit my website at www.rlo.law for information about that.
This morning I touched on several areas that will be of concern generally, and one or two that may affect business owners or managers. Whilst it is not possible to cover every conceivable circumstance, there are a few general things to consider.
Turning firstly to Wills:
Ask ‘What if …’. In the event that you died, do you know where your assets would go? There is a common belief that everything passes to the spouse or unmarried partner. This is not necessarily the case.
A spouse would only be entitled, where there is no Will, to a certain proportion of the estate and will have to share the rest with the children of the deceased. With so many second (or third or more) marriages, and ‘blended’ families this could present real issues. Easily solved by making an appropriate Will.
An unmarried partner has no automatic right to inherit at all – something which could have catastrophic consequences. Again, easily solved by making a Will.
What about couples who are separated, but still married? The spouse may well end up inheriting just because the divorce has not been made final. I dealt with a case a few years ago where this happened. The deceased thought she had finalised her divorce in the 1960s, and had not remarried (luckily – bigamy is an offence). She did not make a Will, and when she died her entire estate passed to her husband who she had not seen for over 50 years.
We also discussed Lasting Powers of Attorney
Again, ask ‘what if …’. In the event that you, as a business owner, lost capacity to make decisions relating to your business who would do so on your behalf? If a sole trader, who would operate the accounts and deal with financial matters, paying employees etc. If a partner in a partnership, does the partnership agreement make provision for decision making in the event that one of the partners is incapable? If a director or shareholder (or both) in a limited company, do the articles of association make provision for decision making in the event of incapacity?
Making a Lasting Power of Attorney is a way in which you can control who steps into your shoes – whether temporarily or otherwise – to make those decisions. I was asked whether this could be a partner or spouse – yes! It is very important that you choose your attorney carefully, and that you trust them to act in your best interests.
You can have different powers of attorney appointing different people for different aspects of your lives – whether personal or business.
Other matters concerning business owners
It isn’t just one’s own affairs that may be affected by death or incapacity, but those of employees or colleagues; suppliers or customers. I mentioned a recent case where a sole director and shareholder of a limited company died and the bank froze the accounts of the business. It is very important that you consider your articles of association to check whether appropriate provision has been made to account for this. Better still, give thought to appointing another director who would be able to allow the company to continue functioning. A shareholder and director are often the same person, but a director need not be a shareholder (and vice versa).
I would encourage you to visit my firm’s website at www.rlo.law where you will find a wealth of information about powers of attorney, Wills and many other matters that we and our businesses are concerned about at the moment.
A very important final thought: it is tempting to simply prepare documents online, or with pre-printed forms from WH Smith but there is no substitute for expert advice tailored to your individual circumstances.
Damian Lines TEP