The tragic impact of the coronavirus pandemic has highlighted the critical need for business owners to ensure their personal affairs are in order, a lawyer says.

Experienced Glasgow solicitor Alison McKay specialises in advising people in setting up the likes of Wills, Powers of Attorney and trusts, and on planning how to manage personal estates.

She believes the human cost of Covid-19 has made many realise they must ensure their wishes are clear, including for if they fall ill or become incapacitated.

Business owners, in particular, are among those becoming increasingly aware that this is something they cannot afford to overlook.

Mrs McKay, who recently joined Scottish legal firm Lindsays as a Director in its Glasgow-based Private Client team, said: “Seeing the impact of coronavirus has been a wake-up call to many people about the need to have their affairs in order.

“It really seems to have focussed peoples’ minds, business owners among them. They have seen why it’s vital for us all to have plans in place for care and finances.

“That’s acutely important for those who run small companies whose employees - as well as their families - rely on them having robust and properly-advised arrangements in place.”

With about 98 per cent of businesses in Scotland classed as small (with fewer than 50 staff), she says there is also a wider economic need for wishes to be completely clear.

“If you’re not part of one yourself, you probably have small businesses among your key suppliers, clients or customers,” Mrs McKay, who has 14 years of legal practice behind her and joined Lindsays from another Glasgow law firm, added.

“While none of us enjoys ‘what if’ discussions with those closest to us, these conversations may prove critical to the future of some businesses, providing security to loved ones and protecting jobs.”

One of the foundations of personal planning is to have a Power of Attorney (PoA) in place.

While discussions on these generally might focus on planning for older age, Mrs McKay says it is something that other people - business owners in particular - should not overlook, a fact highlighted by the way Covid-19 has affected every age group.

She explained: “Let’s suppose you’re a sole trader or run a small company. If you were suddenly incapacitated by serious illness or injury, who would pay suppliers, manage the bank account, deal with contracts or insurance, file VAT returns or generally keep customers happy?

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“If your business bank accounts are in your name and you have no PoA in place, no-one would be able to take over managing the finances. This could be catastrophic for your credit record, business relationships and reputation, as well as for dependents relying on your income.

“Any relative or colleague who wanted to take up the reins would have to apply to the courts for ‘Guardianship’ – a process which can take six months or more. Few businesses could survive such a hiatus.

“Worst of all, this would be happening when family and friends are already struggling with other practical and emotional issues around your illness or injury.”

A business PoA is similar to a personal one in that someone is chosen to make decisions on your behalf, but it includes powers to continue and manage any business. The business attorney doesn’t have to be the same person as your personal one.

How a business PoA is set up depends on whether you operate as a sole trader or have a company or partnership, where provisions for what happens if a partner or director becomes incapacitated may already be in place.

“Securing tailored legal advice to ensure your individual circumstances are taken into account is so important,” Mrs McKay said.

“And, as with many areas of law and business, it’s cheaper to think ahead than have the business paralysed by legal disputes or problems. I often think of a PoA like insurance – something you hope not to use but are relieved to have if disaster strikes.”

A PoA is part of a package of measures that business owners are urged to have in place and which Lindsays lawyers can support.

“With family businesses in particular, the personal and the commercial cannot be treated in isolation,” Mrs McKay continued. “Life events from divorce to someone dying without a Will can jeopardise the future of the business, or land it with expensive legal and accountancy bills.”

An estimated six out of 10 people in Scotland die without a Will, which means that who inherits their estate is determined by Scotland’s intestacy rules.

Wills allow for a planned and pragmatic succession plan about who is best to take over a business - with tailored advice ensuring the Will does not conflict with partnership agreements or articles of association.

Without a Will, intestacy rules will determine who inherits. This could mean very young children or a distant relative inheriting control of a family firm – with poor consequences for staff and other relatives.

Divorce too can be protected against with prenuptial or postnuptial agreements able to ringfence a family business from being included in settlements, safeguarding its financial stability.

Mrs McKay believes the need for strong legal advice when managing personal affairs has never been more important, with her appointment at Lindsays coming as the firm strengthens its Private Client team amid high demand in this area of work.

She said: “Notwithstanding the focus that Covid-19 has provided, changing and diverse family dynamics and the growth of digital assets mean that it’s vital we are clear in our wishes for all sorts of eventualities to protect our wealth and assets for loved ones.”

Grant Johnson, Partner and Head of Private Client Services at Lindsays, has welcomed Mrs McKay to the firm.

He said: “Alison’s arrival reflects the growing demand we are seeing as increasing numbers of people turn to us to secure good quality advice for them and their families.”

Lindsays, a leading firm for people and businesses, also has Private Client lawyers at its offices in Edinburgh and Dundee. For more information, go to www.lindsays.co.uk.