Farming families are being urged to plan ahead if a key decision-maker loses capacity
Farm businesses can face frozen bank accounts, disrupted payments and uncertainty over who can make key decisions if a farmer develops dementia without the right legal arrangements in place.
Private client solicitor Philip Whitcomb, of Clarke Willmott LLP, said farming families can be particularly exposed where finances, subsidy claims, compliance and day-to-day management are concentrated in one person.
He warned that relatives cannot automatically take over business decisions if a farmer loses capacity.
Whitcomb said: “Many farming families are unaware that relatives cannot automatically take over business decisions. Without the right legal arrangements in place, bank accounts can be frozen and key farming operations disrupted.”
The issue can affect much more than access to money.
Grant applications, livestock records, regulatory paperwork, machinery use and the practical running of the farm may all depend on one individual being able to make decisions or provide information.
Driving and firearms licences may also need to be reviewed following a dementia diagnosis.
Whitcomb said the legal position can vary depending on whether the business operates as a sole trader, partnership or company.
Families may therefore need to check whether existing arrangements would still allow the farm to function if a key person lost capacity.
One option is to put a Lasting Power of Attorney, or LPA, in place while the individual still has capacity.
An LPA allows chosen people to make certain decisions on someone’s behalf if they later become unable to do so themselves.
In some farming businesses, a separate arrangement may also be considered for commercial or business matters.
Whitcomb said: “Putting arrangements such as Lasting Powers of Attorney (LPA) in place early, including considering whether a separate business LPA is appropriate, can avoid significant difficulties further down the line.”
He said families should also think about who would be able to access key information if the person normally responsible for the farm suddenly became unable to manage it.
That can include details of bank accounts, grants, animal records, regulatory requirements and other information needed to keep the business operating.
Whitcomb said: “It’s worth thinking about how the farm would keep running if someone was suddenly unable to manage things.”
He added that a clear contingency plan can help identify who would take responsibility for practical decisions and how the business would continue to operate.
The issue can also overlap with longer-term succession planning, particularly where several generations are involved in the farm but decision-making remains concentrated in one person.
Whitcomb said early planning could help reduce disruption while protecting the interests of the farmer, their family and the future of the business.
He added: “Every farm operates differently, but early planning can help ensure the business continues to run smoothly while protecting the interests of the individual, their family and the long-term future of the farm.”