Incapacity of Business Owners

Small businesses are set up for all sorts of reasons.?To provide individuals with greater autonomy, pool resources and skills, give flexibility, or maybe ensure you reap the rewards of your hard work, which you don’t feel being employed would adequately provide.?Amongst other things, you think about profits, property developments, the housing market, investors, interest rates, supply chains and future staff.?What most small business owners don’t think about is their own incapacity or mortality.?So enthused are they with their plans for the future, they make no provision for the curve balls that sometimes life throws at you when you are least ready.

A recent matter that came to my attention related to a charismatic and dynamic businessman, who had moved himself out to Gibraltar.?He was the sole Director and shareholder of his company and his marriage had broken down following an affair.?He had a daughter and adopted stepdaughter from his marriage and his girlfriend became pregnant with a baby boy.

Following a sudden and unexpected bleed on the brain and unsuccessful surgery, he never regained legal capacity and lost some of his physical capacity.

Although he had a will, it referred only to his wife and daughters, didn’t cater for his son, his girlfriend or his business interests.

His brain injuries were so life changing that eventually he was moved to residential care.?He remained in this condition for 9 years following his massive stroke.?He didn’t have a Lasting Power of Attorney for either his business or financial affairs which meant managing his company and financial interest became a logistical and administrative headache.

During the period of time from his stroke until his death the following issues arose:

1.???????????His property portfolio had to be managed to provide an income to pay for his care.

2.???????????He received a tax enquiry regarding his tax residency status as prior to his stroke he had undertaken some asset planning.

3.???????????At the time of his stroke he was in the process of selling his business which ground to a halt when there was no appropriate officer of the company to undertake the sale.

4.???????????His wife filed for divorce and the settlement had to be paid from his estate, as a result of which his will became an issue.?

5.???????????Following his death as there was no proper provision for his partner or son, or his daughters they all brought a claim which took 6 years to resolve.

Although this case presents a multi-jurisdictional problem, it succinctly highlights what can arise from everyday life.?This client wasn’t exceptional.?He was a businessman whose marriage broke down.?He briefly lived in Gibraltar, and he had 3 dependent children.?The unnecessary and considerable costs incurred as a result of there being no responsible attorney to take over his affairs were entirely avoidable.?Your appointed attorney needs to possess skills commensurate with the task you are asking them to undertake.?Do you need more than one? What qualifies your appointed person to be able to run your business, provide for your family and act in your best interests?

Invest some time pondering these questions then give us a call or drop us an email at [email protected].?Sometimes it’s the little things…………...

How can we help?

When planning for a future possible event it is difficult to prioritise when there are so many other things to think about. We can take you through the process step by step and ensure that your business is never left without a responsible officer to take over the day to day should you not be able to.