Protecting your award
If you receive compensation following a personal injury, you will probably just want to get on with your life. As part of this process, we recommend that you consider protecting your compensation through a Personal Injury Trust.
Your Personal Injury Trust is created when you sign a legal document called a 'Trust Deed'. The Trust Deed appoints people (chosen by you) who will look after your compensation on your behalf. They are called 'Trustees'. We can be Trustees if you wish. You can also be a Trustee. It is also possible for you to have the power to remove and appoint new Trustees. The Trust Deed also sets out how the compensation monies should be applied for your benefit.
The Trustees will open a Trust bank account to hold your compensation monies separately from your personal monies. The Trust can pay for a new place to live which may be more suitable for your needs depending on what injuries you have suffered, a new car, petrol, a holiday and much more. You can decide how best to use the Trust monies. Any excess funds can be invested by your Trustees for your future needs.
What are the advantages of having a Personal Injury Trust?
1. Your compensation need not cut your means-tested benefits
Your means-tested benefits are those state benefits you receive because of your low household income. These include Income Support, Jobseeker's Allowance, Housing Benefit, Council Tax Support, Income Based Employment and Support Allowance and residential care home funding.
By setting up a Personal Injury Trust, you may be able to receive your compensation and retain your means-tested benefits entitlements indefinitely. This is perfectly legal and acceptable to both the Department for Work and Pensions and Local Authorities. The Regulations treat Personal Injury Trusts in a special way so that you are able to retain entitlement to your means-tested benefits. But, the special rules only apply if you decide to 'opt in'. This means setting up a Personal Injury Trust.
2. Your compensation can be protected from the cost of long-term care fees when you get older
Even if you do not get means-tested benefits now, the ability to retain means-tested benefits as well as your compensation can be of great value to you and your loved ones in the future.
3. Your compensation can be protected for you and your family
If, at some point in the future, you are unable to look after your compensation, you have the peace of mind in knowing that your Trustees will look after things for you and your loved ones.
A Personal Injury Trust can only hold compensation that you have received as a result of a personal injury. No other monies should be put into the Personal Injury Trust. You can place further compensation for personal injury into the Personal Injury Trust.
If you receive compensation, even an interim payment, it will tend to cut your means-tested benefits. This will certainly be after the twelve months 'period of grace' ends and sometimes sooner. The period of grace is based upon complex legal provisions and our advice is that you should not rely upon it. That is especially if (like most people) you want to retain some of your award for any unexpected expenses in the future.
How can we help?
We have a specialist Personal Injury Trust team who will provide you with advice to ensure that you secure the best deal after you receive your personal injury award.
We can work with you and your independent financial adviser to help you to secure the best possible financial security after you get your compensation.
What other specialist advice do we offer?
- Consideration of your immediate and future benefit entitlements
- The appointment of suitable Trustees and if necessary the appointment of a Professional Trustee
- Preparing the Trust Deed
- Providing a letter addressed to your bank to assist you and your Trustees with opening the Trust bank account
- Providing a letter addressed to your Local Authority and/or Benefits Agency to inform them of the existence of the Personal Injury Trust
- Tax advice
- Completion of Trust tax returns
- The appointment of new Trustees or removal of existing Trustees
- Winding up the Personal Injury Trust
- Putting in place a Will
- Purchasing property using compensation monies held within the Personal Injury Trust