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Rebekka Schaller (name changed) was sitting in the shuttle bus to Geneva Airport and felt downhearted, even depressed. Everything had happened so fast. The International Committee of the Red Cross (ICRC) delegate was en route to her next deployment in an ambulatory healthcare center near the Afghan capital of Kabul. She, as an experienced surgeon, had been trained on how to manage extreme situations. But she found herself still struggling to organize her thoughts.

What had happened? For the first time during her short visit home, Rebekka had experienced what it felt like to have her mother no longer recognize her. Within a short period, the older woman had succumbed to advanced dementia and become completely dependent on nursing care. Rebekka’s physically impaired father also requires it.

The right time to quickly re-organize the family’s assets, capital and real estate had come and gone. It was too late for that now. Suddenly, what the family had hoped to avoid had come to pass.

“The need to plan for a loss of decision-making capacity often arises from an unexpected event,” says Reto Furter, attorney and �۶���Ƶ succession advisor, who knows from experience. “In Rebekka Schaller’s case, those affected were absolutely overwhelmed.” Accordingly, it will take quite some time to arrange everything.

Company owners have twice the responsibility

Whatever solution individuals choose really depends on the person in question, according to Furter. That especially applies when, in addition to capital and real estate, a company's future is being discussed.

The next example concerns Heinrich Waser (name changed), director, sole shareholder and the only member of the board of directors of a larger family business. He had planned for such a dramatic day in a timely manner and his plan was perfectly balanced with his personal circumstances. Waser, father of three grown children, is divorced and has a new partner. In addition to his own company, he also owns the penthouse where he lives and holds private securities.

“All entrepreneurs should look to Heinrich Waser as an example when making arrangements in anticipation of a possible loss of decision-making capacity,” Furter says. He also strongly advises drawing up a power of attorney to stipulate who will take care of you and your private assets one day. It must also stipulate who is authorized to execute shareholder rights and in which form. Additionally, entrepreneurs should ensure that the company’s internal operations are secured through powers of attorney and signing powers.

“Awaiting decisions from some possible officially imposed custodian on how to deal with private and corporate challenges is not an option. Doing so could ultimately endanger the existence of a company,” warns the �۶���Ƶ Succession Advisor.

Check relationships and make arrangements

A new Child and Adult Protection Act has been in effect in Switzerland since 2013. It allows persons, through a power of attorney, to autonomously determine who will take care of them and their assets should they lose their decision-making capacity.

“The spouse’s legal right of representation is limited and vague," says Furter. "For example, it is not enough if the matter involves a mortgage revaluation or a land purchase.” The following principle generally applies: take precautions. Not only must the owner be willing to actually do this, but everyone else, sooner or later, must sit down together and decide who will take over what and in what type of circumstances.

In Waser’s case, the questions were if and to what extent his three grown children should represent him, whether enough mutual trust already existed between him and his partner for her to do so, and how all parties involved should work together and keep one another informed.

"It was important to the Waser family that they be able to engage a representative who could handle both the private circumstances of the boss as well as safeguard his investor rights," Furter summarizes the solution. "With the partner's explicit consent, this was the two older children."

Power of attorney and an entry in the commercial registry established that a colleague of many years would take over operational management of the company. What was more important in this case was that the various documents were drafted with enough clarity and detail so there was no room for interpretation concerning individual responsibilities.