Personal Injury Compensation Trusts
If you, a loved one or family member have received compensation for a Personal Injury, it could be beneficial to transfer those funds to a trust. This can help manage the money carefully over time and ensure that entitlement to state benefits is not affected by receiving such a large one-off compensation payment.
Our specialist team advises clients in different languages on a wide range of legal matters. Call them on 0208 1111 911 or contact them through the website to discuss your circumstances with them.
What is a Trust?
A trust is a legal arrangement for managing money and assets for the long term. It is managed by trustees appointed by the settlor (the person whose money is put into the trust). The trustees will manage and distribute the funds over time, in line with guidance provided by the settlor.
If you were the person injured and you still have mental capacity to make decisions, you can act as a trustee yourself and also appoint others (such as family members, loved ones or a solicitor) to help you manage the trust.
Trusts can help to distribute money and assets over a period of time, based on future events and outcomes. This makes them very beneficial for managing Personal Injury compensation, where future financial and care needs can be hard to predict.
How is a Personal Injury Trust beneficial?
If the injured person is unable to work following the injury, they may be entitled to claim state benefits. However, if those benefits are means-tested, a large compensation settlement might rule them out of receiving the support they deserve.
Given that the compensation payout is intended to last them for the rest of their life and could be needed for costly care and medical treatment, it would be inherently unfair for them be denied benefits.
By paying that compensation payout into a trust, they could manage that money carefully over time, with the help of their trustees. The trust is seen as a separate entity, so the funds would sit outside of the means-testing process for state benefits.
What other legal advice might I need?
If the injured person lacks mental capacity, you may be able to make certain decisions on their behalf. Our Court of Protection specialists can provide the advice you need for this.
We can also advise on Wills, Lasting Powers of Attorney and Inheritance Tax Planning, as any unused funds held in the trust when the beneficiary dies will usually form part of their estate. It is best to plan ahead of time for how their assets will be distributed after their death.
How do I get legal advice on Personal Injury Trusts?
Call us on 0208 1111 911 or contact us through the website and we’ll arrange a time to discuss your circumstances thoroughly with you. The initial call is free and we’ll advise you of our fees before you decide to instruct us.