News & Updates
Powers of Attorney
Owning or running a family business requires many decisions ranging from small, everyday tasks to more complex and substantial planning. Having the ability to make those decisions is often taken as a given but what happens when that is no longer the case? Who will run the business and make sure it continues without any problems? It is a common misconception that only elderly or infirm individuals require powers of attorney or that a family member can step into your shoes should you lose the ability to make decisions for yourself. In fact, no one has an automatic right to manage your affairs and everyone should have a power of attorney in place as no one knows what will happen in the future.
A power of attorney is a written document through which an individual can nominate a trusted person or persons to manage his or her affairs. Anyone over the age of 16 who is capable can make a power of attorney. There are two types of power of attorney: financial and welfare.
A financial power of attorney (also called a continuing power of attorney) appoints one or more people to manage your financial and property affairs, including any business you may own. An attorney can access your bank accounts, enter into leases, run investments and appoint solicitors to act on your behalf and, more generally, ensure your business continues to run smoothly. Without a power of attorney, a guardian would need to be appointed, which is a costly and time consuming process.
It is also advisable to nominate someone to make decisions regarding your welfare. A welfare power of attorney gives authority to someone to make decisions about personal matters, such as consent to medical treatment or determine where you should live. A welfare power of attorney cannot be used unless and until you lose the ability to make those decisions for yourself.
Anyone over the age of 16 can be appointed as an attorney. This can be a family member, friend, professional adviser or a combination. It is advisable to appoint more than one person to provide a safeguard should one attorney be unable to act.
Before a power of attorney can be used, it must be registered with the Office of the Public Guardian. This is a public body which maintains a central register of attorneys and can refer any matters of concern to court. Nonetheless, it is important that you nominate someone that you trust to act on your behalf.
A well drafted power of attorney can provide you with peace of mind to ensure that not only your business affairs, but also your general financial and welfare matters, are taken care of if you can no longer do so yourself. We can provide guidance for you to ensure that your wishes are clearly expressed in your power of attorney.
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at February 2019. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.