In these unsettled times, it's sign of a smart business owner to expect best but prepare for worst. What will happen to your business if you are unavailable due to any circumstance? Perhaps you are a Reservist and get called into active duty, for example.
By drafting a Power of Attorney, you will be giving someone legal right to look after your business affairs if you are unavailable, away, mentally incapacitated, or otherwise unable to make business decisions.
Just as many individuals postpone writing a will, many business owners avoid step of drafting a Power of Attorney. Both appear to have a superstitious belief that act of preparing for potential problems will attract misfortune.
When we apply clear light of reason, we all know that writing a will doesn't imply imminent death and drafting a Power of Attorney doesn't suggest we'll be unable to operate our businesses. Both are simply evidence of good planning.
What if an accident or an illness causes you lose mental capacity for a period of time? Without a Power of Attorney, your family, colleagues and courts will be pitted against one another trying to straighten things out. Advance planning will minimize problems that will arise later.
Alternatively, perhaps you are planning to be away from your business for an extended period. It's not something we like to consider, but in extended absences of an owner, potential for employee fraud or theft increases. You want someone in charge who has your best interests at heart.
Naturally, you will want to consult a lawyer to discuss your unique situation. However, following considerations are likely to be applicable in most cases:
1. When you draft a Power or Attorney, you must be "of sound mind." Powers of Attorney can be revoked or modified, but again, you must be deemed to be of sound mind. Documents drafting or amending Powers of Attorney must be witnessed.