Safeguarding your Business: How Partnership Agreements, Lasting Powers of Attorney and Pre/Postnuptial Agreements work together

Why a Partnership Agreement alone may not be enough

A Partnership Agreement outlines roles, responsibilities, and dispute resolution but may not provide adequate protection in cases of incapacity, divorce, or death. Integrating a BLPA and Pre/Postnuptial Agreements ensures critical decisions remain in the right hands.

Protecting the Partnership in case of incapacity

If a partner loses mental capacity their decision-making powers can be frozen without a BLPA.

• A BLPA allows an attorney to make business decisions.
• Combined with a Partnership Agreement, it ensures seamless decision-making and prevents operational delays.

Protecting the business in the event of divorce

In divorce proceedings, when considering the matrimonial finances, a spouse’s interest(s) in a business will be considered.

• A Partnership Agreement defines how a partner’s share is valued and transferred.
• A Pre/Postnuptial Agreement (if entered into freely and properly executed with both parties having a full understanding of its terms) can protect business assets and provide clarity as to how these interests are to be dealt with in the event of divorce. The Agreement can prevent an ex-spouse from gaining an interest in the partnership.

Ensuring stability after a partner’s death

A deceased partner’s share may pass to a beneficiary, which can cause disputes.

• The Partnership Agreement can allow for the remaining partners to assess the Partners suitability before finalising their position, or restrict the pool of potential beneficiaries to begin with.

A key tool for farmers in succession planning

Succession planning is often a difficult conversation, with concerns about when and to whom assets should be passed down. The combination of a Partnership Agreement, BLPA, and Pre/Postnuptial Agreement provides a structured approach to alleviating these concerns. These legal tools ensure that assets are transferred in a way that maintains business continuity while addressing individual and family concerns about ownership, control, and long-term viability.

Taking action: Secure your business’s future

Many business owners assume that their partnership will naturally continue as intended. However, without a robust written Partnership Agreement, combined with a BLPA, and/or a Pre/Postnuptial Agreement in place, they risk uncertainty and potential legal disputes.

At Ware & Kay, we specialise in helping businesses protect their long-term success by ensuring they have the right legal frameworks in place. Contact Sarah Parker, Head of Agriculture and Samantha Sinclair, Head of Family Law to review your existing arrangements and discuss how we can strengthen and protect your business. Tel: Malton 01653 692247 or York 01904 716000 or email [email protected] and [email protected].