Setting up a personal injury trust does not have to be complicated or expensive. I offer a fixed fee in most cases of £480 including VAT.
A personal injury trust is a trust which holds personal injury compensation. Benefit regulations allow personal injury compensation to be ignored, provided the compensation is held separate from your personal funds in a trust. A personal trust is perfectly legitimate.
I have set out all the points you must think about and the information I will need to help you.
The answer to the needs of compensated people in receipt of benefits or care is a bare trust to hold personal injury compensation. This is the simplest form of trust. It is easy to manage, has no tax complications and allows the compensated person to retain a level of control. Provided you follow a few simple rules, you can use the trust fund with freedom.
A personal injury trust is a positive way to keep and use your compensation and benefits
A personal injury trust is a positive thing, not a problem.
A trust is created by a legal document, called a trust deed. Trustees are appointed and hold the trust fund separate from your personal money. The trust is an arrangement to allow trustees to hold and use your money for your benefit. 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, which seems fair enough.
Do I need a personal injury trust to protect my compensation and benefits
A personal injury trust is the only legitimate way to hold and use compensation and still receive means tested benefits. Such a trust is an opportunity to keep and use your compensation and receive means tested benefits.
The personal injury trust means your compensation will be ignored if you or others in your close family either claim, or need to claim, means tested benefits. The same applies if you require local authority care.
It is the benefit regulations themselves which allow a payment in consequence of an injury to be disregarded, or ignored. A sensible and generous law.
I continue to be surprised by the advice given to people receiving accident compensation about personal injury trusts. The advice presents a personal injury trust as an optional extra. A personal injury trust is vital in many cases and advisable in others.
Keep compensation and still claim means-tested benefits if compensation is protected in a personal injury trust.
Personal injury trust or special needs trust or compensation protection trust and protection of State means-tested benefits. All names used for a trust to protect personal injury compensation.
A trust will mean personal injury compensation is ignored when your finances are assessed for benefits and care. Here we help you understand protection of compensation with a trust.
When you receive compensation for a personal injury it can take you above the financial limits for means–tested State benefits, and affect your entitlement to local authority support for care. So be aware and look at the benefits you are receiving today, and just as important the benefits you may need in the future. Don’t just look at yourself as benefits are claimed by a family unit.
It is worth repeating that you must also look at your care needs, both now and in the future, as a personal injury trust can protect compensation when local authority care is assessed.
Will I lose my benefits when personal injury compensation is received? This question is asked by people settling personal injury compensation claims, worried they may lose their means tested benefits.
You will be relieved to know you can legitimately keep your benefits and the compensation. This is allowed by the benefit regulations themselves. What you must do is set up a trust to hold the compensation and keep it separate from your personal funds.
Receiving means-tested benefits depends on the money held by you and those included in your claim. The usual barrier to a claim is holding £16,000, but if you hold more than £6,000, your benefits will be reduced.
When you receive a sum of money you must inform your benefits agency, which will decide if your entitlement to benefits should change. If you have received personal injury compensation, are there options?
To create a trust for personal injury compensation you first need a trust deed. This is a legal document which creates the trust and appoints your trustees.
Once your trust document is complete the next step is for the trustees to open a separate bank or building society account to hold your personal injury trust fund. Your trust is created by a deed and the trustees then open a joint current account.
You cannot create a trust just by opening a separate bank account, you need to first create the trust with a deed. People sometimes turn up at a bank with a compensation cheque, but without a deed, and this is why confusion is caused. I suggest you waste no time on banks before the trust deed is complete.
Compensation protection trust is one of the names given to a trust designed to ensure that personal injury compensation is not taken into account if you claim means-tested benefits or need local authority support for residential care.
The term compensation trust is just a name given to this type of trust, others being personal injury trust and special needs trust. A special needs trust is something quite different but I include it here as it is often thought to be a trust for protecting compensation. Continue reading “Compensation protection trust”
I remember a call from a lady who had just received a cheque for £20,000 compensation from a personal injury claim. Neither she nor anyone in her family were claiming means-tested benefits; but she intended to save the money for the future. Her compensation solicitors advised a personal injury trust was not necessary. Were they right or wrong?
Personal injury trust for those with personal injury compensation in Northern Ireland
Those living in Northern Ireland can set up a trust for personal injury compensation. I can prepare the trust for you. All information on this website applies to those in Northern Ireland and to the UK generally.
A personal injury trust can be a very good idea even if you are not receiving State means-tested benefits or local authority care. You must consider your situation today, your situation in the future, and do exactly the same for those you claim benefits with.
A local authority must provide accommodation for vulnerable adults who fall outside the responsibility of the National Health Service. But the local authority can charge for the service if a person’s capital is between £14,250 and the upper capital limit which currently is £23,250.
If you need care and have received compensation for a personal injury, that compensation can be ignored in this capital assessment if it is protected by a personal injury trust. Setting up a personal injury trust is an obvious step if you are already receiving care. A trust can be just as necessary if you do not require care today, but may need it in the future. Continue reading “Personal injury trusts and the cost of long term care”
When you apply for most state benefits, a means tests will look at your capital and income. Working tax credits is not a means-tested benefit. It is an adjustment to your earnings based on your income alone.
A personal injury trust can protect most payments made in consequence of a personal injury
The regulations which govern entitlement to means-tested benefits tell us what sums are taken into account and which are ignored. Among those ignored are “any payment made to the claimant or the claimant’s partner in consequence of any personal injury to the claimant or, as the case may be, the claimant’s partner.”
If you receive compensation for personal injury, you must inform the agencies handling your claim for means-tested benefits. It is the change in your financial circumstances which makes notice necessary.
You can see from the questions I am asked there is a shortage of clear advice about compensation protection trusts, or personal injury trusts as they are better known. The banks and building societies often lack experience of opening accounts for trustees. This tells me that trusts are not being used where they are necessary. Continue reading “Why aren’t there more personal injury trusts?”
This page is to help you set up and operate a joint current bank account for the trustees of a personal injury trust. It is along similar lines to the information provided to clients of Mark Thompson Law for the creation of a trust for personal injury compensation. If your trust has not been drawn up by this practice, do not assume all of the information applies to you.
This page will answer most questions and help you and your trustees to set up and operate your trust.