If you have had a successful accident claim, then you may be entitled to receive compensation. However, it should be noted that for people who are in receipt of means tested benefits and other means tested support or care, any damages received may affect your entitlement to benefits.
In order to protect your benefits, it may be prudent to consider setting up a Personal Injury Trust. The main advantage of such a Trust is to maintain your entitlement to means tested benefits.
When you receive a payment in respect of a personal injury suffered by you, your entitlement to means tested benefits may be reduced or stopped. If your partner is also in receipt of means tested state benefits, their entitlement may also be affected following you receiving your personal injury payment.
Personal injury payments held in a specific type of trust are disregarded from the means test.
There are advantages and disadvantages which will depend upon your own circumstances. When considering which type of trust is most appropriate, you may want to consider the following questions:-
- How much protection do I need?
- How much access do I want to the capital, with and/or without the agreement of the Trustees?
- Who would appoint Trustees, both now and in the future?
- Who will make investment decisions?
- Do I need professional Trustees and if so, what will they charge?
You will need to appoint at least 2 Trustees, and it is normally you who will decide who you appoint. This decision needs to be considered carefully. The Trustees can be family members or friends – however this may not be the best choice, in the event of future fall out. Professional Trustees may be a wise choice as Trustees’ duties are onerous.
One of the main responsibilities of the Trustees is to invest the assets held within the trust. They should ensure that you are included in this decision making process, and they should also ensure that they take independent financial advice where needed. The Trustees are responsible to make sure that your funds are working as hard for you as possible, in line with your risk profile, and to monitor the performance. You and your Trustees can retain the services of a professional to take on this responsibility, if required.
If you have a claim, and think you would benefit from a Personal Injury Trust, we would highly recommend you contact your personal injury solicitors to discuss this with them.
We at Maxwell Hodge Solicitors can assist you with this. If you would like to discuss, please contact a member of our Personal Injury Team to set up an appointment.