A personal injury trust is a positive thing, not a problem

A personal injury trust is a positive thing, not a problem.
A trust is created by a legal document, called a deed. Trustees are appointed and hold the trust fund. It is not complicated.
Benefit regulations allow you to keep receiving means tested benefits and hold and use your compensation. What’s not to like?
Use your benefits for the basic expenses, then use your compensation direct from the trust as you wish.
All you have to do is keep the compensation in the trust separate from your own money.
In return for keeping your benefits, this looks fair enough.
There is a lot of nonsense on websites about how to avoid setting up a trust. Using a trust is the only legitimate solution, the other solutions all involve fraud. Your compensation is not private as all compensation paid is notified to the Department of Work and Pensions under the compensation recoupment scheme.
The question I am most asked is, how can the compensation in the trust be used? The trust fund should not be used for the basics for which benefits are intended, beyond which the trust can be spent and/or invested in any way you could do so yourself.
I always advise the trust bank account and investments should be operated on the basis of at least two trustee signatures. That means a cheque book only account, which prompts questions too. Cheques are more useful than you might imagine. There will be purchases which require electronic payment, for which the trustees can authorise the use of a credit card and pay the credit card bill by cheque. That allows the trust to operate in the 21st century.
So, there you are. You have a legitimate way to keep receiving benefits and hold and use your personal injury compensation. The law makers accept a compensated person has not won the lottery, the compensation being paid for injury and financial loss, both past and future, so why should they be penalised. I think it is a generous law, so please don’t mess about with the fraudulent alternatives and take advantage of the generous legitimate route.

About Mark Thompson

Personal injury and accident specialist solicitor
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2 Responses to A personal injury trust is a positive thing, not a problem

  1. Ricky Chen says:

    can personal injury trust be a disabled person trust at the same time? If so, can the injured person who is now disabled be one of the trustees? also once the trust is setup, can the trust purchase a property and become the disabled injured person’s landlord?

    • Mark Thompson says:

      Take care with the terminology.
      The term “personal injury trust” simply means a trust which holds personal injury compensation.
      A disabled persons trust, sometimes called a vulnerable beneficiary trust, is quite different. Such a trust can get special tax treatment. They are usually set up by a parent or family for a disabled or vulnerable person. There is a useful explanation here.
      You can hold personal injury compensation in a vulnerable beneficiary trust, the choice being based on tax.
      A trust you set up could purchase a property and be your landlord. You would not be able to claim housing benefit for the rent payable to your trust.

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