If you have successfully claimed compensation for personal injury you should seek advice on the benefits of setting up a Personal Injury Trust. This is particularly important if you receive means-tested benefits.
If you own capital between £6,000 – £16,000, your means-tested benefits will be reduced. If your capital exceeds £16,000 you will not be able to claim means-tested benefits at all. However, if you place your compensation into a trust, this amount is disregarded when assessing the amount of capital you own and you can still have access to your compensation.
You should be aware that there are different types of trusts that can be used when setting up a Personal Injury Trust, with their own tax regimes such as a:
- Bare Trust
- Life Interest Trust
- Discretionary Trust
Your personal circumstances and the amount of compensation you receive will determine which trust best suits your needs.
Personal Injury Trusts may also be recommended for long term planning:
- Funding care home fees
- Claiming means-tested benefits in the future
- Protecting your compensation from divorce or bankruptcy
- Protecting your compensation for friends and family