You have made a successful personal injury claim, but how do you protect the compensation awarded to you?
A personal injury trust can help you to look after your long-term financial future. This is particularly important if you are receiving means-tested benefits.
Personal Injury Trusts and Benefits
Currently, if you have capital over £16,000, you could lose all entitlement to benefits. If you have between £6,000 and £16,000, your benefits may be affected on a sliding scale.
If you are receiving means-tested benefits, having a personal injury trust will ensure that any compensation held within this trust will be disregarded when it comes to the assessment of such benefits. In short, this means that you can continue to receive benefits, yet still have access to your compensation.
These figures are not that high in the grand scheme of things, and so, if you receive a personal injury compensation award that brings you within or over these figures, it is worth looking at whether a personal injury trust is the right option for you.
However, there are a couple of things to bear in mind when considering setting up a personal injury trust. First, the award must be in consequence of a personal injury. This means that the injured party must receive a benefit from the trust. Unfortunately, this is not the case for awards made to the family of a person who has passed away.
Secondly, the trust can only include personal injury compensation. You cannot add other, non-personal injury funds to it, or the trust becomes tainted which can put the whole amount in jeopardy (this would defeat the object of the trust in the first place).
Even if you are not receiving benefits, there are many reasons why setting up a personal injury trust might help you. This includes the need to claim means-tested benefits in the future, if a partner receives means-tested benefits and you live together, or when planning for future care fees.
At Linder Myers, we can advise you and assist you in setting up a personal trust. Everyone has their own individual circumstances, and we are happy to discuss the right option for you.Find out more about our Court of Protection department