How to Protect your Injury Compensation and Awards: Personal Injury Trusts
What is a Personal Injury Trust?
This trust is a legal document which permits any money you receive from an injury award to not be considered when you are evaluated for your benefits. This trust comes into force when the compensation is large enough to have a substantial impact on receiving benefits. This trust allows you to keep control of your compensation while preserving your entitlement to any government benefits.
However, the advantages of using this trust do not only consist of keeping benefits. In case your circumstances change you may be entitled to benefits in future and so a personal injury trust is a sound investment. Some injured clients who receive awards and compensation are not always in receipt of benefits. These clients may simply want to protect their funds from outside parties including relatives, or else want help to manage their money. Moreover, it will also protect your award from being used to pay care fees if you must be permitted into care in respect of your injuries in the future. It allows an individual to manage and control their own funds.
The Importance of a Personal Injury Trust
There are many advantages to creating a personal injury trust which make it an important investment. These include ignoring your compensation when determining your entitlement to benefits and local authority funded care facilities if you require them. The individual will be able to maintain control, and there are minimal restrictions when you want to spend money from the trust. The client can still freely decide what to do with their award money and can still use it on life’s luxuries, for example on a car, mortgage repayment, school fees, or holiday.
However, you should be aware that the client will not have direct access to their trust as there are two trustees involved in creating a personal injury trust. There is also a cost to set up the trust, but this varies depending on the case and firm.
Who Will Qualify for a Personal Injury Trust?
Any individual who is in receipt of an award for a personal injury can create a personal injury trust. A personal injury trust is also applicable for adults with incapacity, in which case a Guardian or someone with authority will create the trust on their behalf. Where the individual in receipt of the injury award is a minor, the parent can set up a personal injury trust if it is in the child’s best interest.
When Should I be Made Aware?
If you are correctly informed about a personal injury trust upon signing the Form of Acceptance at the end of proceedings, it is possible to keep your compensation in addition to maximising any benefits or support you qualify for. A trust is not always necessary for everyone, but it is important to receive professional advice to avoid any financial disadvantages and protect interests. Depending on the firm, you should be notified about a Personal Injury Trust before the discharging of your award, usually upon signing a Form of Acceptance.
When Does it Need to be Set Up?
There is a 52-week period provided by the benefits agency where the initial payment you receive will not be included in testing for benefits. This period only applies for the first payment so there is the risk of receiving a second payment in which case you would need a trust as soon as possible. If after this 52 -weeks you decide you want your award for your injuries disregarded for the purposes of means testing, you can put your award into a Personal Injury Trust. However, it is often best to set up a Personal Injury Trust as soon as possible to avoid any complications.
Overall, the most fundamental aspect of a personal injury trust is that the compensation or award transferred into the trust are not considered when determining your eligibility for benefits. This is the most legitimate alternative if you want to keep your entitlement to benefits.