The founder of a global corporation is declining in health. His ambitious children, scheming wife and an array of other relatives and advisers are jostling for position. There is vast wealth at stake and a range of rivalries in play.
To viewers of the TV drama Succession, the story is instantly recognisable as that of media baron Logan Roy and his family. Yet it highlights many questions faced by real-life families in similar situations. What happens when a founder loses the ability to run their company? What happens to someone’s finances if they can’t make decisions for themselves? And how should their care be managed?
While nobody delights in thinking about them, these questions must be faced. We routinely help our clients think through these issues because it is only by looking at what may happen and what you have or have not put in place that you can avoid the sort of difficulties dramatised so effectively in Succession.
And with an ageing global population (the World Health Organization expects the number of people aged over 60 to reach 2.1 billion by 2050), the issue is likely to affect an increasing number of families.
Too many are unprepared, even as they reach retirement age. We acted for a successful businessman* who had recently begun an active retirement and was planning to sail around the world. Twice married, he had been intending to update his Lasting Power of Attorney (LPA) document but had not quite found time when he had a boating accident that left him brain damaged.
After many years estranged, his first wife was left in charge of decisions about managing his assets The situation was extremely challenging for the whole family, however we were able to support them and the businessman in assessing what their options were.
At least that individual’s affairs were based largely in one country. In our experience it is particularly critical for those living international lifestyles to set out their wishes if their health should decline for any reason. Having plans and people who will look after you in one location does not mean that you will be protected in another; the law is often different and the outcome uncertain as a result.
We recently supported a vulnerable person who had been living with family in the UK, but wanted to return to the Far East, where he had significant assets. However, the Lasting Power of Attorney that was protecting him in the UK would not be valid in his home country. Fortunately, our elder law team in Asia found a creative solution that would keep his assets safe and allow him to fulfil his wish of returning home in his old age.
Of course, it’s not only older people who lose capacity to manage their own affairs. Even the youngest founder of a technology startup could suffer a life-changing injury at any time. The more adventurous someone’s lifestyle, the more they are at risk of needing to rely on a power of attorney.
A good example was a company founder who had a cycling accident at a relatively young age that left him in a long-term coma. Unmarried and without children, he had never planned for what might happen to his significant assets if he died or was seriously ill or injured.
We were able to advise his family when they consulted us about a range of issues relating to his estate going forwards. A court application was required to put various sensible and tax-efficient financial arrangements in place and it was a comfort to his family to have his affairs put in order, with donations made to causes that mattered to him.
It is not always easy thinking about life not turning out as we expect but it is always better to have prepared for the worst. That is especially true for those who run companies or have complex family situations. In a business that is still being run by its founder, an event that leaves them unable to make decisions for any period of time could cause chaos. Often they know what they want to happen on a corporate level but have not considered how that interacts with their family life and different relationships. Equally, where someone has a family who rely on them to a significant degree, it could be debilitating for everyone if that person loses capacity.
While the Court of Protection can appoint a representative to make decisions on someone’s behalf, in practice families and businesses may find it difficult to welcome an outsider in such a position of power. It is far better to foresee the situation yourself and appoint someone who knows how you would wish things to be done.
The caveat is that the person must be absolutely trustworthy and have the confidence to make the decisions that need to be made. We regularly advise on cases where attorneys have to be removed because they use the donor’s money (often very significant sums) for their own means. In a notable case, an attorney took the early decision to buy themselves a new car, laptop and Rolex watch – and invest tens of thousands in a reptile farm.
While the attorneys were investigated and removed, wrongdoing may not be spotted right away and it is often difficult to retrieve money that has been spent or mismanaged. In a worst-case scenario, there are even examples of power of attorney documents being set up fraudulently.
The most important thing any of us can do to protect ourselves is to be realistic about our limitations and think ahead to problems that may arise. Even the most powerful people are vulnerable to illness and injury. The way to remain in control is to foresee the event and create a Lasting Power of Attorney that sets out what will happen in every jurisdiction and aspect of your life.
That will mean less of the drama that scriptwriters enjoy – but more confidence, security and peace of mind about the future.
*Some details have been changed to protect confidentiality
