Protect Your Legacy: Why Every Business Owner Needs a Will and Power of Attorney

Hello and welcome to the UCAM podcast.

I'm your host, Sarah Jolly Jarvis, and today I'm joined by the very lovely Claire Sutherland.

And we're going to be talking all around powers of attorney and wills and things like that.

And so I'm going to let Claire introduce herself to you and then we will get cracking from there.

So fire away, Claire.

Hello, everybody.

I'm Claire Sutherland from Claire Sutherland Wills and Trusts.

And I specialise in making wills, trusts, and lasting powers of attorney simple for people.

I like to take the complication out and make sure that people understand what's available to them to protect their business, themselves, their families, and just make it easy.

Okay, that easy sounds good because this is not a fun topic, is it really?

Like, this is not anything that anyone ever jumps out of bed and is excited for.

No, absolutely not.

It kind of falls into that horrible area of things like insurance and boring things that you don't really like to spend money on.

But it's the protection that it can give you, which is kind of similar to insurance, really, which

just gives you peace of mind, takes away stress.

So, yeah, I get it's boring for me.

And sometimes

you're kind of doing it, which is good, isn't it?

I mean, it's good that you like it.

I think sometimes it's more around for the people that you care around than it is for you, really, isn't it?

Because obviously, a lot of these things are looking at if you are no longer around or able to do what you're currently doing.

So, it is more around protecting those that you love, isn't it?

It is absolutely that.

And I know we all like to think that the horrible scenarios are never going to happen to us,

but unfortunately, you just never know what life is going to throw at you.

So, if you're prepared and if you've done everything

to put everything in place for your children, for your loved ones, make sure that everything runs as smooth as possible, then it can take away so much stress at a really

already stressful situation.

You know, if they're dealing with loss, they're already suffering a lot of grief, they don't want to have to deal with finances, issues around business issues around personal so it really helps the ones that you leave behind really that makes sense that makes sense okay so what should a normal person so a regular everyday person what should they have in place as a sort of standard okay standard there are two things to have in place so a will a will essentially especially if you've got children under the age of 18 a will is going to allow you to say if anything happens to the parents who's going to look after those children

so that's really vital it also allows you to say the assets that you own where do you want them to go you know this is your choice this is what you've worked all your life to build this is your whole estate who do you want to inherit that so a will is is really really important you can upgrade a will by adding protective trusts so if things like protecting your children's inheritance against divorce settlements in the future if things like like securing the value of your home against care fees if you need to go into care in the future are important to you, then you can put protective trust in that will.

And there's so many benefits to that.

The second thing that you should have is a lasting power of attorney.

Nobody likes to think of yourself going through accident or illness, which means that you can no longer make decisions for yourself.

But these things happen and a lasting power of attorney is a powerful document.

It means that you are giving the the legal right to somebody you love and trust to make decisions.

Managed to joke.

Nothing.

Okay.

I might just get myself some more water in a minute.

It's always when I'm doing podcasts.

Always.

It's like, are the mics out?

Let's get coffee.

Right, carry on, Carrie.

So, last empowers of attorney give the legal authority to the people that you choose as attorneys.

That might be your children, it might be your partner, it might be your sisters, your siblings.

But essentially, you're saying if I develop something like Alzheimer's, dementia, if I have a stroke, if I'm in a coma, if I'm in any situation that I can no longer act myself,

then this person is able to look after my property, my finances, or my health decisions.

So what care home I go into, how I'm looked after, what diet I eat.

So really, really important documents.

A lot of people think that's just for the elderly.

But money saving expert, you know, Martin Lewis is a massive advocate for these documents.

They're not just for one-year-old.

No, and that's the thing is actually, because we got into a conversation about this because one of my clients, her husband was in his 40s and he had a stroke and they didn't have anything like this in place.

Because why, you know.

Why would you naturally, as a regular, you know, regular everyday person, think, you know what, I need these sorts of powers of attorney?

And the health one one was something that I wasn't aware of so I knew about the the finances one because that was something that my parents needed for my grandma um and so they could they could sort of look after her estate when she went into into a home but I was never aware of the health one so just taught me top sort of level through that

So the health and welfare lasting powers of attorney, there's some major things here.

So firstly, if you were ever in a position where life sustaining treatment decisions needed to be made for you, so you were on a life support machine and the quality of your life, if you continued, was going to be reduced, you can essentially give your attorneys the right to say,

actually,

I know

that my mum, my sister, whoever the bee, the one that's affected, would not want to live in a vegetative state or in a state where their health was reduced to the point that their life was no longer of the quality they enjoyed previously.

Then you can give somebody the right to make those life sustaining treatment decisions over and above the doctors.

So that's one of them.

The second one is, and not many people know this, if you were hospitalised and the hospital decided that you needed to go into care to look after you, the hospital choose what care home you go into.

That might not be the local one that's 20 minutes down the road, it might be one that's two hours away, it might be one that you know isn't convenient, and once the doctors have made that decision, decision, as a family, you don't have the right to override that decision without a lasting passive attorney.

Which is sad, isn't it?

I find that really

absolutely crazy.

There is a really famous case, Betty Figg.

Her mother was in a care home and she believed that her mother was being mistreated in the care home.

She wanted to take her home and look after her in her own house.

She went and took her mother from the care home and took her home and the door was actually knocked down by the police and they took her mother back to the care home that the daughter did not want her to be in.

So it's crazy that as family, you think, but they're my mum, I know what's best for her, they're my dad, they're my sister, they're my whatever the relationship be.

Without a lasting prize of attorney, you don't have the right to make those decisions.

Okay,

that makes sense.

Yeah, the health one is a lot of people do count that secondary to the finance one, but one thing to say about the finance one, I think, picking up on your point, a lot of people think when you're married that you would naturally, if something happened to your partner, you would naturally be able to access your joint bank accounts.

It's just not the case.

If the bank is made aware that your husband or your wife is in a situation that they can't make the decisions, the joint account will be frozen because they're protecting the assets of the person that is not able to make those decisions.

So it's really important to know as a married couple that marriage is not enough.

You need

to be able to practice.

What more do you want from me?

I need another bit of paper.

Okay, so that makes sense.

So as a business owner,

The vast majority of people who listen are either the soul traders or small limited companies.

There may be some partnerships mixed in there as well.

What do you need as a business owner?

Yes, so if we start with last living powers of attorney, you can have these for yourself individually, but you can also have them for your business.

So

if you

came into a situation where you could no longer make decisions, or you had an illness, which meant your ability to make decisions was being affected, you might not want the same person making decisions about your business as who would make decisions about your personal finances.

So, for the property and financial, you can have a separate one for your business.

That's really important if you are in a business that is regulated.

So, say, for example, you're an accountant, you can only elect another attorney in your last and powers of attorney that is of the same standard.

So, you couldn't say as an accountant, I want my wife to be my attorney of my business because they wouldn't understand

regulatory exactly obligations.

So, you would have to have somebody else in that industry that is of the same quality of qualification as yourself.

That makes sense.

Lasting powers of attorney for businesses, especially for partnerships, you know, if you're in partnership with somebody,

you can't, if somebody got a degenerative disease, you can't say, Oh, they've got Alzheimer's, so I no longer want them to be a director of the business, because that's that's impacting on their human rights.

So, if as partnerships you had a last lasting powers of attorney, you would be able to say, actually, they're not of sound mind, I can make the decision, or another person can make the decision instead of them.

So, it's really important that if you're in partnerships definitely, that you have these documents in place because otherwise,

if somebody is in a coma and you need two directors to sign expenditure on your bank account, all of a sudden your business expenditures are stopping.

So, without that document, that's really,

really important.

From a will perspective,

if you have a limited company

and it's trading, so if it's a limited company with investments, things like investment into property, then it wouldn't qualify.

But if it's a trading limited company, then you get business property relief in your will.

So if you pass your business limited company, then you get 100% inheritance tax relief or a different percentage.

Speak to your accountant accountant because sometimes there's different brackets for different service types, but you get 100% business property relief for inheritance tax because it's a limited company that was trading and that passes to your

beneficiaries.

But what's also important with limited companies is if you've only got one director and they die, that's the business.

So the day of the death of the person that is the limited company director is the day the business stops.

So it wouldn't be able to continue.

so it's important to think about that you can address that in your will okay

and and put protection in place if you don't have a power of attorney specific to your business but you do have a power of attorney for you does that power of attorney cover your business or does it just go into a very vague area

Very vague area.

For businesses, you also need to refer to.

So when you set up a business, you have something called Articles of Association or memorandums of association.

So, in there,

depending how they've been written, there might be allowances for what happens if the director dies.

Those documents will always overwrite a will.

So, if there is something in those documents and your accountant will hold them

or check them on company's house,

that

whatever is stated in those documents will be what legally happens over your will.

And last powers of attorney,

again,

if you're in a regulated industry, then no, the attorney can't just step in.

But again, there might be something in the Articles of Association that says

in the instance of

loss of currency or reduced, there might be something in there.

Okay.

So it's a good idea to check those first.

And then if you haven't got something in there, then the power of attorney would be the way to go.

Yeah.

Yeah, that makes sense because you've also got because i always think out you know like you sort of play out different scenarios don't you and it's like if you've got a partnership and the power of attorney the power the decision making goes to that person's other half who you don't have a working relationship with who doesn't really understand the business they're not you know they're going to be in quite an emotional state themselves they're not going to necessarily be making the best decisions and then that baton is passing to that person in that state to step in for the that individual you know you can see where that could really spiral, and you could end up in a really tricky situation.

Definitely.

And, you know, you start a business with a business partner that you have a great relationship with, and you bounce off each other well, and you make great decisions together.

You might not have the same chemistry or the same relationship with their husband or wife.

You know, there could be some major clashes of personality, which again

could really impact the business and how it performs.

Yeah, that makes sense.

Especially, I always think of, oh, if you get someone who's totally clueless, but they don't realize how clueless they are.

They don't know what they are.

That would be like my worst case scenario, would be that

they go all guns in, but they don't actually know what

they're pushing through.

Yeah.

It'd be very

frustrating.

Painful.

Okay.

So if they haven't got these things, so really, as a normal human being, you need that will, you need those powers of attorney in place.

beyond that, and we've kind of we've spoken about this before that, you know, as long as if you've got a house, you've actually got assets, that's when you kind of the time is to kind of have a will.

As far as the business side of things, it's looking at the you know the documents for setting up the business if it's a limited company, and it's looking at actually where do you what do you want to happen?

Um, yeah, it is the kind of key thing, isn't it?

Definitely, definitely.

And then once they're in place, you know, you're kind of protected if you fall poorly and you can't make decisions protected.

If you know, if you pass away, it's

just a lot less stress.

Yeah.

And what happens if it gets a little bit out of date?

So, you know, the business name has changed, or the person names changed, or any property which is referenced isn't your home anymore because you've moved house.

Is that something you need to update?

It's best practice to update them, but it would never invalidate a will.

So if your residential address changed or your business address changed, then there will be track of that.

You know, you will have changed it at the company's house.

It will be obvious that that is still you.

So it would never invalidate the will

or the last and powers of attorney, but it's always best practice to update them.

Okay.

I can appreciate, you know, sometimes you just don't want to pay additional costs to do that.

So it's personal decision.

Will it tend to slow the process down, I presume?

It could cause extra complication, yeah, at the point of having to deal with the estate.

You're gonna have to find the paper trail or, you know, prove.

So it it adds complexity.

So to keep it up to date is definitely the best practice.

And what I would advise, obviously.

And presumably powers of attorney within your business and all those kind of the legal stuff within your business can be charged, can be set against the business.

It can be a business expense.

Yeah, absolutely, because it's best practice.

It's for the business

so yeah you can charge that as a business expense it can be invoiced to the business brilliant okay so that's that can help some people and they're thinking you know what it's not something i want to take on personally it's covered and then you know at the end of the day you're going to pay less corporation tax so yeah absolutely bonus bonus happiness is so um okay claire so if they want some more help on this if they're like you know what claire seems to know what she's talking about, where's the best way to get hold of you?

Go to my website, which is www.claire Sutherland.com.

There will be an inquiry form on there, my phone number's on there, there's your ability to book a free 15-minute consultation with me.

So, every access point to me is on that website, and um, I'd be glad to help you.

Brilliant, thank you very much, Claire.

Well, thank you for your time, it's been really good to speak to you, and uh, I look forward to speaking to you all next week, guys.

In the meantime, have a great rest of your week.

Bye for now.