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Contingency Planning


In the middle of an active, busy (working) life, many families and business owners are reluctant to even consider the possibility of an accident or illness. As a result, contingency planning tends to be neglected. When something does happen, it often turns out there is no general power of attorney or enduring power of attorney for care or healthcare in place, and nobody thought of a living will or final will.

Proactive contingency planning helps to ensure that your family or family-owned business has legal capacity at all times. Our Private Clients experts help you draw up an emergency planning checklist that covers all the key legal and financial aspects.

Contingency planning for the family

Important contingency planning issues in the private sphere include the following:

  • Is a general power of attorney in place to ensure that the family still has legal capacity if a family member is out of action?
  • Does the family member have a living will to indicate how he or she wishes to be treated medically (e.g. life-prolonging treatments)? This will make it easier for family members to deal with the situation.
  • Does an enduring power of attorney for care or healthcare designate who should take decisions on everyday legal matters and relating to the assets of the family member if the latter is no longer able to act?
  • Does a will specify who receives the assets if the family member dies suddenly?

Contingency planning for business owners

If a partner or shareholder is incapacitated for an extended period, it could paralyse the entire company, depending on the provisions in the articles of association. Accordingly, (managing) partners or shareholders should draw up a contingency plan that addresses the following questions, in addition to their personal affairs:

  • Is a general power of attorney in place which allows a third party to take over the duties of the partner or shareholder affected by the emergency?
  • Should different people be named in the power of attorney for business-related matters than for private affairs?
  • Does the contingency plan deal with succession in the event that the partner or shareholder is permanently unable to perform his or her duties?
  • Are the contingency plans aligned with the articles of association?

Contingency planning for foreign assets

If some assets are located outside Germany or, even more importantly, if family members live abroad, the legal provisions of each country must be taken into account in contingency planning. In such cases we draw on experienced private wealth experts from across the international CMS organisation to serve our clients.

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April 2020
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