The Startup Founder's Guide to Lasting Power of Attorney (LPA)

The Startup Founder's Guide to Lasting Power of Attorney (LPA)
Photo by Andy Hermawan / Unsplash

As a startup founder, you're always thinking ahead and planning for the future of your business. But have you considered what would happen if you were suddenly unable to make decisions for yourself? That's where a Lasting Power of Attorney (LPA) comes in.

An LPA is a legal document that allows you to appoint someone you trust to make decisions on your behalf if you become unable to do so.

There are two types of LPA that are particularly relevant to business owners:

1) Health and care LPA

This allows your appointed attorney to make decisions about your medical treatment and day-to-day care.

If you're the sole decision-maker in your business, your health is crucial to its success.

Having a health and care LPA can ensure that someone you trust can make decisions about your treatment and care, allowing the business to keep running smoothly.

2) Financial decisions LPA

This allows your appointed attorney to handle and make decisions about your money and property. This can ensure that your company's finances are managed smoothly and efficiently, even if you're unable to do it yourself.

Without an LPA in place, your loved ones and co-founders may have to go through a lengthy and expensive legal process to make decisions on your behalf. This can cause unnecessary stress and disruption for your business and personal life.

When Life Happens: How an LPA Saved One Founder's Business

As a founder, you're likely used to being in control of every aspect of your startup. But what happens when an unexpected health emergency strikes and you're unable to make critical decisions for yourself and your company? This was the situation faced by one entrepreneur we recently worked with.

Spencer was in his mid-40s and had built his company from the ground up. He was the main decision-maker and had not yet taken steps to plan for the possibility of being unable to manage the company due to health issues. Unfortunately, he suffered a severe stroke that left him unable to communicate or make decisions for several months.

Thankfully, he'd previously taken the important step of setting up a Lasting Power of Attorney (LPA) for both his personal and business affairs. This allowed his business partner to step in and manage the company's affairs during his recovery, ensuring that critical decisions were made and the company continued to operate smoothly.

Without the LPA, the company could have faced significant financial and operational challenges. His business partner wouldn't have had legal authority to make important decisions without going through a lengthy and costly legal process, which could have resulted in disruption to the business and potential financial losses.

The story highlights the importance of planning ahead and taking proactive steps to protect your business and loved ones. By setting up an LPA, you can ensure that your wishes are respected and that your business affairs are managed smoothly and efficiently, even if you're unable to do so yourself.

It's never too early to start planning for the unexpected, so please don't wait until it's too late. Your proactive planning could save you and your loved ones from unnecessary stress and disruption down the line. Just talk to a professional to help you create an LPA that covers both your personal AND business affairs.

It's the startup insurance you didn't know you needed.