Who will have power to decide if you can't?
In the farming world there will probably be times in our lives when we need to appoint others to act for us in respect of legal and financial business.
This has extended in more recent years to health and welfare matters.
The ability to appoint a third party to act for us as an attorney has been with us for many years in different forms.
The most serious instances when we need an attorney to act for us are when we lose our mental or physical capacity to act with regard to our legal transactions and businesses. Examples might be an accident leading to a person being in a coma or a similar catastrophic injury preventing the person from physically signing documentation or indeed mental incapacity leading to the same problem
One example is when a sole farmer fell into a coma for some weeks. During that time the milking herd had to be milked, the stock had to be fed, the trading accounts and bank accounts had to be dealt with together with all other aspects of the business and there was no signed power of attorney allowing anybody to sign off on transactions.
With the considerable help of the bank and the professionals at the time the storm was weathered and the farmer thankfully made a good recovery.
On another occasion an agricultural tenant farmer was out of the country when an agricultural tenancy notice was served upon him. Therefore he missed a deadline concerning the counter notice and was bound by the notice.
Before October 1, 2007, the only way of planning for incapacity was to make an enduring power of attorney. The person making the power (“the donor”) would name a person or persons to make decisions if he or she were to become incapable in the future.
Any enduring powers of attorney made before October 1, 2007, are still valid but the power only relates to decisions about the donor’s financial affairs and did not extend to health and welfare decisions.
Lasting powers of attorney were introduced on October 1, 2007. There are two types, namely one for health and welfare and one for property and financial affairs. The donor of a lasting power can appoint one or more attorneys, and can dovetail the power to suit what is specifically required.
There are also general powers of attorney, although these do not cover an individual in the case of mental incapacity. They are limited in scope in transactions such as a house sale or purchase while someone is abroad. It is not unusual for solicitors to be granted such general powers of attorney.
Lasting powers of attorney and general powers can be very useful, not just in the farming and business world, but also for the private individual. However it is strongly recommended that proper professional advice is first taken on preparing the powers of attorney to avoid the potential for misuse.
Steven Corfield is a partner and agricultural specialist at Shropshire law firm, FBC Manby Bowdler LLP.
