It is an age-old myth that you have to be ‘old’ to complete a lasting power of attorney (LPA). This is prevalent more so in the farming community on the basis that farmers notoriously never retire. Statistics from 2017 confirm that the average age of a farmer in the UK was 59, with less than 3% being under 35.
With an aging population, LPA’s are important later in life to assist with property and finances should you become mentally incapable of dealing with your own affairs, or a physical ailment prevents you from doing so, but that should not be the end of the story.
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If you need assistance with making a lasting power of attorney, contact our specialist Agriculture & Estates team.
Agricultural Property Relief FAQ
What is a lasting power of attorney?
A lasting power of attorney is a legal document where you can appoint someone, or multiple people (known as attorneys), to be able to assist you in your affairs should you need an extra helping hand, or you become incapable of dealing with your own affairs.
There are two separate documents; one to deal with your property and financial affairs, and the other to deal with your health and welfare.
What assets don’t qualify for Agricultural Property Relief?
Make sure it is someone you trust. They also have to be over the age of 18 and think carefully about whether that person is organised enough to deal with the paperwork that this role will involve.
You can also choose more than one attorney to look after your affairs, say in the case of an elderly parent who has two grown-up children. In this case you will need to specify how they can act between;
- jointly,
- jointly and severally or,
- jointly in some aspects but severally in others.
It can be a relative, a friend or you can choose a professional, such as your accountant or solicitor. You need their agreement to appoint them and it is always advisable to choose a replacement for them in case they are unable to carry out the task at the time.
Importantly, it should also be someone that has a good understanding of your business, or how a farming business operates, so that the business can seamlessly continue with your attorneys acting on your behalf.
Where should a property be to qualify for APR?
None of us know what the future holds but we all want to be sure that if something happens that leaves us unable to make decisions about our own finances, property, care or wellbeing, that someone we trust could do it for us.
A lasting power of attorney is there as a safety net. You insure your barn every year regardless of what has happened in the past. You don’t not take out insurance because you have not had to make a claim in the past, but do it on the basis that you may need to in the future.
LPA’s should be viewed as an insurance policy. The hope is that you would never need to use it, but should the unforeseen happen, you are covered.
Farming has once again been crowned the UK’s ‘deadliest industry’ with a higher accident rate than any other industry. The most common incidents involve machinery and vehicles, working at heights, working with hazardous chemicals and working with livestock. Being in remote locations with poor phone signal is also a contributing factor.
Whilst many accept that there are associated risks with working in agriculture, few do anything to forward plan should the unthinkable happen.
Who would run your business if you became incapacitated, either permanently or otherwise? Would anyone have access to the bank accounts to continue to pay staff and contractors?
Increasingly, courts are requiring specific LPA’s to enable businesses to continue. Legislation does not prevent attorneys acting in a trade or profession or business, but without an express power in place, businesses can grind to a halt.
Consideration needs to be given to the type of business you operate. If you are a sole trader, a simple LPA may suffice, as the business does not have a separate legal identity.
If you operate under a partnership, you can rely on the provisions within the Partnership Agreement. If there is no written agreement in place, it is likely that the partnership would be dissolved if one partner becomes incapacitated. Future planning for your business in the event of an unforeseen event is therefore paramount.
If you do not have a lasting power of attorney in place, the court process to get a Deputy order is lengthy, which could have disastrous consequences for your business.
Because of the danger of the profession, tied in with the value of your business, every farmer, young or old, should have an LPA in place.
