Do I need a Personal Injury Trust?
If you have received compensation from a personal injury claim you should strongly consider placing all or part of the damages that you have received into a personal injury trust (which is also sometimes called a compensation protection trust).
A trust is a way of placing money outside the direct ownership of a person (‘the beneficiary’) into the control of others (‘the trustees’). This can be helpful if the beneficiary is not capable of managing their own money, perhaps as a result of the accident.
Even when a beneficiary is capable of managing their own affairs a trust can have other significant advantages:
If you receive benefits your personal injury lawyer may have advised you that for 12 months after you receive your compensation, the amount of your damages will be ignored if your capital is being assessed to determine your benefit entitlements. Once that 12 months of grace has passed, you risk losing your benefits if you keep your damages in your own name. If however you place the assets in a trust, even though you retain the right to use the money in your trust as you choose, the law allows for the damages in the trust to be ignored in capital calculations for benefit purposes. This should help you to preserve the benefits that you may well rely on.
Damages held in a personal injury trust will also be ignored if your capital is being assessed to establish your right to have your care home fees paid by a local authority.
A personal injury trust must be set up within 12 months from the date that you first received damages, so if you would like to discuss personal injury trusts in more detail, please call us on 01458 850 146 or contact us.