Anyone receiving compensation for a personal injury should consider whether a personal injury trust could be of use to them – now or in the future.
If you or your partner receive means-tested benefits or a local authority funded care package then you should seek advice on setting up a Personal Injury Trust to hold your compensation. Remember, even if you are not receiving any benefits or services at the moment, this could change. Consider events like redundancy, divorce, or the need for residential care in the future.
If you are the parent or guardian of a child who has received compensation, it’s important to think about what they might need when they become an adult.
The main benefit of using a Personal Injury Trust is that assets held within it will be disregarded when you apply for means-tested benefits. This means you will continue to get benefits and can spend the compensation as you choose. It may also protect your compensation if you require a local authority funded care package.
There are some other good reasons to consider the use of a Personal Injury Trust:
How do Personal Injury Trusts work?
Ideally, you should set up the Personal Injury Trust before you receive your compensation (or any interim payment) or as soon as possible afterwards. However, for many people, it can be done at a later date.
You can usually appoint yourself as a trustee but this should be alongside at least one other person. Depending on the type of trust structure used, you can retain control and the ability to bring the trust to an end if you wish. You can also add and replace trustees.
Your trust must be managed by people you trust and can rely on. If you don’t have anyone you feel able to appoint as a trustee or you’re due to receive a large compensation payment, and don’t want to tackle the trust administration yourself, you might want to consider appointing a professional like Cairn Trust Management. If you do not appoint a professional trustee we recommend taking advice for the first year to make sure you are keeping appropriate records and accounts.
We offer a range of services that allow you as much, or as little, decision making power as you want. We offer a pro-active service and will develop a plan for how funds can be used to enhance your life in the short, medium and long term.
If you are considering setting up a Personal Injury Trust, please get in touch and we can give you an idea how best to take things forward.