What is a Personal Injury Trust?

A Personal Injury Trust is a legal document that permits compensation received from a personal injury to be disregarded for means tested benefits.  It can also protect the compensation from being used for care fees in the future, so to maximise inheritance to family.

By considering the future, at the outset of receiving compensation, it allows you to retain as much of the money as possible for your own use and potentially for your family in the future, whilst maximising the amount of State help available to you.

What are the benefits of a Personal Injury Trust?

Understanding a personal injury trust and its associated benefits is essential for individuals looking to protect their compensation settlements. One of the primary advantages of a personal injury trust is the safeguarding of your award. When you place compensation into a personal injury trust, it effectively separates those funds from your personal assets, thereby ensuring that the money does not impact any means-tested benefits you may be entitled to. This is crucial for maintaining access to government benefits and support programs without the risk of disqualification due to increased asset thresholds.

Another significant benefit of establishing a personal injury trust is the control and management of your funds. By appointing trustees—individuals you trust to oversee the trust—you can ensure that the compensation is used in a manner consistent with your needs and intended purposes. This oversight can include managing expenses related to ongoing medical care, rehabilitation, costs, providing a layer of financial security during your recovery. This level of control empowers you to direct your funds where they are most needed, giving you a sense of financial security and independence.

Tax efficiency is an additional benefit to consider when exploring what is a personal injury trust. Depending on the jurisdiction, personal injury trust funds can offer tax advantages, such as exemptions from certain income or inheritance tax types. This can preserve more of your settlement for future use, lessening the financial burden in the long term.

Furthermore, having a personal injury trust can simplify financial planning and budgeting. With your compensation held in the trust, you gain a clearer perspective on your financial health and can make informed decisions on expenditures and savings. The trust acts as a structured financial tool designed to support your specific needs, reducing stress and uncertainty during your recovery period.

Additionally, a personal injury trust can provide peace of mind to you and your family. Knowing that your compensation is secure and allows you to focus on your rehabilitation and overall well-being, without worrying about the potential misuse or mismanagement of your funds. In summary, understanding what is a personal injury trust and the multifaceted benefits it offers can greatly contribute to safeguarding your financial interests and ensuring that your compensation is used to its fullest potential.

How can Andrew Isaacs Law help me set up a personal injury trust fund?

At Andrew Isaacs Law, we understand the intricacies of setting up a personal injury trust fund and how it can significantly benefit you following an injury. When you ask yourself, “What is a personal injury trust,” our experienced team is here to provide you with a comprehensive explanation. We have a longstanding history of assisting clients in protecting their compensation through the effective establishment of personal injury trusts. Upon securing your compensation, it’s crucial to ensure these funds are safeguarded from means-tested benefits assessments and creditors. Trusts serve as a protective legal instrument, ensuring that your awarded compensation is specifically used for your long-term care and recovery without negatively impacting your entitlement to state benefits.

Our dedicated lawyers at Andrew Isaacs Law will initially meet with you to understand your unique circumstances and explain in detail what a personal injury trust is and how it works. We’ll take the time to answer all your questions comprehensively, ensuring you’re fully aware of the benefits and trust. Our solicitors are well-versed in drafting trust deeds tailored to your particular needs, ensuring that your fund operates in compliance with current legal standards and regulations.

Information accuracy and transparency are our top priorities. Andrew Isaacs Law takes pride in being consistently clear about your options and the associated costs during the setup process. manage. By choosing Andrew Isaacs Law to help set up your personal injury trust.

How does a Personal Injury Trust work?

Instead of the compensation being paid directly to you, the compensation is paid to your Trustees in a specialist bank account which they control on your behalf.  You are known as the “Beneficiary” and the Trustees release money as and when needed if they agree.  The Trust is to be run in your best interests.

For the Trust to enable you to remain eligible for State help, it has to be placed in a specialist bank account and kept separate from your finances and not to be used for daily living expenses.  This way there is no question that the money falls outside the parameters for affecting your eligibility for means tested benefits.

Trustees

The Trust Deed needs two Trustees to be appointed and this can be you and a family member, friend or professional.   The Trustees control the specialist bank account, but the monies can only be used for your benefit during your lifetime.  The Trust Deed details what the Trustees can do.

The Trustees must act in your best interests and therefore you need to ensure that you choose people that you trust and can work with.  As the Trustees have to act in your best interests, they may choose to withhold money from you, as they may have good reasons for doing so.  However, you normally always retain the right to be able to remove a Trustee if you feel that they are not acting in your best interests and appoint someone else.

Time limits

You need to consider a Personal Injury Trust before, at the time or just after receiving the compensation award, as you have 52 weeks from receiving an interim or final settlement to set up the Trust.  It is important to recognise that the 52-week period applies to the first payment.  You therefore must set up a Personal Injury Trust as soon as you receive or are about to receive a compensation payment.

How do I access the money?

You can always access the money by applying to the Trustees and them signing at the bank that a withdrawal is to be made.

You can use the money on anything you like, holidays, electrical purchases, mortgage capital repayments, school fees etc.  We would advise that the money is not used for daily items such as utility bills, mortgage interest payments, rent etc, to ensure that the compensation monies do not affect your means tested benefits entitlement.

How can Andrew Isaacs Law help?

Our experienced Personal Injury Trust Team can provide advice, help and assistance in creating and managing a trust.  Just give us a call on 01302 349 480.

Ginette McCaffery – Solicitor

10/08/2022