Personal injury trust

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.Image shows personal injury trust deed to protect means tested benefits

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.

A short-term decision may cost you dear.

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I may need a personal injury trust

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.

Image shows trust deed for personal injury trust to protect means tested state benefits

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Personal injury trusts and working tax credits

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.

It is only income from savings which affect tax credits, not the savings themselves.  You can find a helpful explanation about tax credits and capital and savings.

So what protection is provided by a personal injury trust?

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Which bank account is best for a personal injury trust

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.

There are a small number of banks which will open a joint account for trustees. I will recommend banks to clients on the basis of recent client experience. The trust account should require at least two signatures for a financial transaction.Bank or building society account wanted for personal injury trust Continue reading “Which bank account is best for a personal injury trust”