Living longer and making plans

Farming is a way of life. Farms, and the control of them, are usually passed down through family dynasties, with farmers taking great care when preparing their Wills to ensure that the farm remains intact and can be run successfully by the next generation.

Although the need for a Will is universally accepted, Lasting Powers of Attorney (LPAs) remain a mystery to many and those who have heard about them tend to think they are something for consideration much later in life!

Let’s take the example of farmer John, who at 60 years of age, runs a successful farming business in partnership with his son and his daughter. The farmhouse is in John’s sole name and he pays the mortgage and household bills from his personal bank accounts. John is also a signatory on the partnership accounts. Sadly, he suffers a stroke and is left unable to look after his own affairs.

Without an LPA no one can access John’s bank accounts or manage his financial affairs. The bank will not discuss specific matters with his children in relation to the personal accounts as they do not have permission from John. A long and costly Court of Protection application is needed to ensure that John’s children will be able to manage his finances. However, anyone can make such an application and it may not, therefore, be John’s children who are appointed!

This could all have been avoided if John had made an LPA when he was in good health. John could have appointed his children (or other people of his choosing) to look after his property and finances should he be unable to do so himself. At the point John lost capacity, his children could lodge the LPA with the bank and other financial institutions and act without the need for a Court order. They could ensure that the bills and mortgage continue to be paid and the partnership runs smoothly.

A sad consequence of longer life is an increase in those suffering dementia or loss of mental capacity. It is crucial that farmers consider what would happen to their personal and business affairs if they were to become one of these statistics. LPAs can be a much needed solution to this difficult dilemma.

For further advice on making an LPA, contact Vicky Raynes or one of the Rural Business Team at Birkett Long LLP – 01206 217611.