RURAL businesses and farmers are being warned that time is running out to protect their properties and business affairs in the face of new Government legislation.

Newcastle law firm Ward Hadaway is warning that changes to powers of attorney coming into effect on October 1 will potentially affect all countryside businesses.

A power of attorney is a legal process by which the "donor" gives the legal right to someone else - the "attorney" - to manage their financial affairs and property.

It is most often used in cases when an older relative loses the capacity to manage their affairs.

At the moment, it is possible to grant an enduring power of attorney (EPA), which allows the attorney to deal with part or all of the donor's financial affairs even if the donor loses capacity.

This can be crucial, particularly if one of the partners of the business is elderly and may lack the capacity to make decisions in the future. However, from October EPAs will be replaced by lasting powers of attorney (LPAs), which will cost more to obtain and raise doubts over what powers the attorney can exercise over the donor's estate.

Alison Burn, partner in the private client department at Ward Hadaway, said: "For many people in the country, their home and property is also the mainstay of their business. This makes the issue of a Power of Attorney even more important to people in the countryside. Granting an LPA will be more complex than granting an EPA. The form of the document is longer and an additional certificate - generally given by a doctor or independent solicitor - is required.

"There is concern that the ability of the attorney to make some decisions while leaving other decisions to the donor will cause problems and it is also felt that the cost of an LPA will be far greater than an EPA."