If you make a successful Personal Injury or Medical Negligence claim, you’ll get a pay out of compensation. A Personal Injury trust offers a place for these funds to go where they’ll be protected by at least two Trustees, including yourself.
But what you include in your Personal Injury Trust isn’t just limited to compensation. You can also include insurance payments, charitable donations and Interim Payments as long as they’re related to your injury.
Having a Personal Injury Trust can provide reassurance that your compensation is safe and secure. This is especially important if you expect to receive a large payout or if you’re vulnerable and need help managing your compensation award.
Our Personal Injury Trust Solicitors can talk to you about your needs and wishes and help you set up your Personal Injury Trust quickly so you can have peace of mind that your compensation is taken care of.
Is a Personal Injury Trust Right for me?
If you’re due a payment of compensation, your Personal Injury Solicitor is likely to have discussed setting up a Personal Injury Trust with you. But you may still be wondering if it’ll be worthwhile for your situation.
As a rule of thumb, if you have more than £6,000 in savings, your means tested benefits could go down. If you have more than £16,000 in savings, they could stop altogether.
A Personal Injury Trust acts to protect any benefits you receive, as funds within a Trust won’t be considered in benefits calculations. Even if you’re not claiming benefits when you receive your compensation, having a Trust set up will ensure you have this protection in the future.
But there are times where the amount of compensation and a person’s intentions for using the money will make having a Personal Injury Trust unnecessary. For example, your compensation award may be under the relevant threshold.
We’ll talk through some of the benefits of setting up a Personal Injury Trust below to help you make your decision. Alternatively, you can get in touch with our expert team of Personal Injury Trust Solicitors for advice tailored to your situation.
What are the Benefits of Setting up a Personal Injury Trust?
- Means tested benefits are protected
We’ve mentioned the use of Personal Injury Trusts as a way of protecting means tested benefits. This is one of the most important advantages of opening a Trust because if you’ve suffered an injury, you may have to give up work but your outgoing costs won’t stop. In fact, they could go up with the expense of care services and home adaptations.
State benefits can support you if you’re in this position, but these will be based on your means, which will include your compensation if it’s outside of a Trust. If your compensation award is above a certain amount, you might not be considered eligible for state benefits, including:
- Housing benefit;
- Council Tax benefit;
- Disabled persons Tax Credit;
- Pension Credit;
- Job Seekers’ Allowance;
- Income support;
- Universal Credit;
- Child Tax Credit;
- Employment and support allowance.
Setting up a Personal Injury Trust will make sure your compensation can be used as intended, rather than as a replacement for the state benefits you’re entitled to.
- Knowledge and expertise of Trustees
The right Trustees can manage your compensation award effectively and make sure your family gets the most out of it.
By appointing a Solicitor as a Trustee, you can reduce the burden of handling your compensation award. A Solicitor can also use their expertise to support big financial decisions like adapting property and making investments that will make your award go further.
- Additional protection
It’s not uncommon for people receiving compensation to be vulnerable and they might not be able to make decisions about a large amount of funds.
A Personal Injury Trust will be protected by at least two Trustees whose job it is to make sure the money in the Trust is spent wisely. Trustees must approve of all transactions which protects funds from being used inappropriately.
It’s really important that the people chosen to act as Trustees are trustworthy and able to carry out this responsibility as the Trust will usually need to provide for the injured person for the rest of their life.
- Compensation is separated from other funds
With a Personal Injury Trust, compensation can be held separately from any other funds you might use for day-to-day outgoings. The advantage of this is that your compensation award won’t be confused with your ‘normal’ money.
If you’re expecting to receive compensation from a Personal Injury or Medical Negligence claim, get in touch with our expert Personal Injury Trust Solicitors for advice and support on setting up a Trust account.
FAQ's About Personal Injury Trust Funds
- How Long do I Have to set up a Personal Injury Trust?
There’s a 52-week period where any compensation or interim payments you receive won’t be included in the calculating of your means tested benefits. But it’s always a good option to have your Personal Injury Trust set up before your claim settles so that your compensation award is disregarded in eligibility assessments from the start.
- How Much Will it Cost?
Depending on how complex your Trust is and whether any home visits are needed, it will usually cost £900 to set up a Personal Injury Trust (including VAT).
We can request that this set up cost is included in your settlement as well as any related costs for running the Trust.
- How Many Trustees do I Need?
You must have a minimum of two Trustees and the maximum number is four. It’s also important to remember that you’ll be included as a Trustee.
All Trustees will need to agree to the terms of a Trust Document and they’ll be legally required to carry out these terms.
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