"We fight to get you the compensation you deserve and then we work hard to protect it."
When should you consider setting up a Personal Injury Trust?
If you have made a claim for a personal injury and you are expecting to receive compensation in relation to that claim, you should immediately seek advice on setting up a personal injury trust.
Why should you consider setting up a Personal Injury Trust?
A personal injury trust will protect your entitlement to any means tested benefits that you are receiving or may be entitled to receive in the future, which may include long term care costs.
Alternatively, you may be thinking of using your compensation to pay off part or all of your mortgage, or use it to buy a property. You can protect all or a part of your property against means testing by creating a personal injury trust.
What are means tested benefits?
Once the trust account is open, your compensation or any payment derived from your personal injury can be transferred directly into the account.
Who can be a Trustee?
You must choose at least two trustees, one of which can be you.
You may consider a family member, a friend or a professional advisor. If you choose a professional advisor, they are entitled to charge for their role as trustee. However, a lay trustee such as a friend or family member cannot charge.
We strongly advise that you choose a professional trustee, as they are independent and can ensure that the trust is administered to comply with ongoing legal, administrative and tax requirements. It is important to understand that you are the only beneficiary to the Trust and you will have a say in how your compensation money is utilised for your benefit.
What will the Trustees have to do?
The main duty of the trustees is to ensure that they look after your compensation and manage the funds for your sole benefit. They will need to keep bank statements, written records of decisions made and review the Trust on an annual basis to ensure that it is running smoothly.
Can your Trustees take independent advice?
Your trustees are entitled to seek advice from a financial advisor if both you and the trustees wish to invest any of your compensation. They are also entitled to seek legal advice, for example in relation to purchasing a property, paying off any mortgage with your investment or any taxation or legal obligations in relation to the trust.
Can you change your Trustees?
Yes. You have the power to change your trustees at any time provided everyone is in agreement.
How do you end the Trust?
You can end the trust at any time providing all the trustees agree. A resolution has to be drawn up for all trustees to agree and sign. Any funds remaining in the trust will be paid out to you.
Please note, that if you are still in receipt of means tested benefits at the time the trust is ended, you could lose your benefits.
Do you have to notify the Department of Work and Pensions (DWP) that you have received compensation?
Yes. You must immediately notify the benefits agency if there is any change in relation to your financial circumstances.
If you set up a personal injury trust, we will notify the relevant authorities on your behalf.
You must set up the trust within 52 weeks from the date that you first receive any payment deriving from your personal injury.
Can you still set up a Trust after the 52 week disregard period?
Yes. However, you must be able to prove that the monies being paid into the trust are compensation monies.
What should you do now?
If you wish to proceed with a personal injury trust or if you have any questions, please contact the NewLaw Personal Injury Trust team today on 0333 003 1909
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