Legal News | 18.05.26

Lasting Powers of Attorney and agricultural or business assets: why planning matters

For farming families and business owners, wealth is often found in agricultural and business assets rather than solely personal finances. Although succession planning and its tax implications are vital considerations, many individuals overlook the implications of losing mental capacity during their lifetime.

Lasting Powers of Attorney (LPA) are essential in establishing clear guidelines for the protection of personal and business interests if capacity is lost.

What is an LPA?

LPAs allow individuals to appoint the person or people they trust to make decisions on their behalf, including if they become unable to do so. In this process, the individual is known as the “donor”, and those who are appointed are known as “attorneys”.

There are two different types of LPA; these are as follows:

• Property and Financial Affairs LPA, which covers financial decisions; and
• Health and Welfare LPA, which relates to medical care and living arrangements.

For farming families and business owners, the Property and Financial Affairs LPA is especially important.

Why are LPAs Crucial?

If an individual were to lose mental capacity without an LPA in place, there is no automatic assumption as to who has the authority to manage the individual’s financial affairs; this is even inclusive of spouses and business partners. Instead, for an individual to be appointed, an application to the Court of Protection must be made. The process can be time-consuming and expensive, leaving the farm or business unable to operate as normal.

Concerning agricultural businesses and landed estates, the impact of not having an LPA can be severe. Practical decisions, such as managing the farm, paying employees, and dealing with suppliers, may become delayed or prevented altogether, placing the business at risk.

By having an LPA in place, attorneys can act immediately, helping to maintain continuity, protect assets, and safeguard the future of the business.

Tailoring LPAs to Agricultural and Business Assets

LPAs can be carefully drafted to reflect the intricacy of farming and business structures, for example:

• You can appoint attorneys who are familiar with the inner workings of the farm or business;
• The LPA can include guidance or restrictions regarding the management of business interests; and
• Separate provisions can be outlined to distinguish between personal and business decision‑making.

Peace of Mind for the Future

Creating an LPA ensures that your future plans are clearly defined and carried out with certainty. Individuals with agricultural and business assets should note that having an LPA in place offers reassurance that trusted individuals could act in their best interest if necessary. Thus, protecting both personal interests and the ongoing operation of the farm or business.

Early advice is essential. LPAs should be reviewed regularly and coordinated with wider estate and succession planning to ensure they remain fit for purpose as circumstances change.

If you would like advice on putting LPAs in place or reviewing existing arrangements, the Agricultural and Landed Estates Team would be happy to help.