Business Law: James Skellorn on a bad day for Peggy Woolley
- Credit: Archant
“Is that all there is? Where is the rest of the money?” ? so said grasping stepdaughter Hazel Woolley to Peggy Woolley at the reading of Jack Woolley’s will in a recent episode of The Archers.
These words would strike fear into anyone who lacked Peggy’s steel. Peggy has been managing Jack’s affairs for many years using a power of attorney.
Jack Woolley was a serial entrepreneur before the term had been invented and owned the Grey Gables Hotel, the local newspaper, a café and the village shop.
However, he became mentally incapable and Peggy had to step in to manage his affairs using either a Lasting or Enduring Power of Attorney registered with the Office of the Public Guardian.
It is a nightmare situation when someone who runs a business becomes mentally incapable. Having the right power of attorney in place, appointing the right people and giving them the right powers is a vital precaution.
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The question of whether to keep the businesses running or sell them off or close them down is extremely difficult. Is there a reliable and competent manager to keep a business running, or will it rapidly dwindle if the driving force is no longer there?
Peggy decides to sell off all of the businesses and let the shop, in a move which is prudent from a commercial point of view but creates a big Inheritance Tax problem when none existed before, as interests in trading businesses which would have been exempt are turned into lumps of money which, without careful planning, will ultimately attract Inheritance Tax bills.
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All who run businesses should have either an Enduring Power of Attorney (created before October 2007) or a Lasting Power of Attorney in place. If there is no power of attorney, someone has to be appointed Deputy by the Court of Protection and considerable cost and bureaucracy ensues.
The job of the attorney is burdensome and usually thankless, as Hazel demonstrates. The attorney must always have in mind the day of reckoning when the mentally incapable person dies and the attorney is answerable to the executors and beneficiaries of the estate.
It is absolutely crucial, and a duty, that an attorney managing someone’s affairs keeps adequate financial records so that they can demonstrate that they have dealt with everything properly.
No doubt Peggy’s records are immaculate and the avaricious Hazel will be run out of town on Jo Grundy’s horse and cart. We can’t wait.
: : James Skellorn is a partner at Barker Gotelee Solicitors.