Personal injury Trust solicitors

When a person, even a child, receives compensation for personal injuries the child can put that compensation in a trust under the control of others known as trustees.

Or who may receive means-tested State benefits in the future should set up a personal injury trust.

Any capital between £6,000 to £16,000 will be treated as generating a ‘tariff income’ of £1 per week for every £250,000 and means-tested State benefits would be reduced by the corresponding amount.

For those over pensionable age, it is the first £10,000 of capital that is disregarded. Entitlement to means-tested State benefits takes into account not only the beneficiary’s income and capital and that of their partner (if they have one). It is not affected by any capital their children have.

If you are not on means-tested State benefits then you can set up a personal injury trust at any stage, assuming that you have not combined the funds from the award with any other money.

However you have to be careful that you only spend your money on things that the authorities who administer your benefits deem reasonable and if they are unreasonable then you could be accused of ‘deprivation of capital’ and a ‘notional capital’ will apply which effectively means that you are deemed as still having the money even if you had spent it and this would affect your benefits.

For example, it may be considered unreasonable if a claimant simply gives the money away to family members, although if you have formal Loan Agreement then this would probably be deemed reasonable. Repaying formal debts such as credit card balances, mortgage, rent, Council Tax or utility arrears would also not be an issue and these items could be paid immediately without being seen as depriving yourself of capital. It would also be acceptable to buy a new car, although it would be a car in your usual price range. Similarly, buying a property that you are to live in would not be an issue but the capital value of a second property would be included in the capital calculation when assessing your State benefit entitlement.

They would be responsible for keeping all records, paying any necessary tax and dealing with the investments related to your personal injury trust.

We recommend that you have at least two Trustees as a minimum of two Trustees are required to hold land. We do not recommend that the beneficiary is also a Trustee as this can provide complications at a later stage should the non-beneficiary trustee die.

A Trustee can be anyone over the age of 18 such as family and friends and they should not be bankrupt or have a criminal record. With larger Trusts, we recommend that a professional Trustee, such as a solicitor, is appointed. Within the Trusts that we prepare, we always include a clause which allows the beneficiary to appoint and retire Trustees as they wish.

We are able to give impartial advice and have contacts with many other professionals such as financial advisors, fund managers, and therapists so that we can offer a comprehensive and holistic service to fully support the needs of a beneficiary. Furthermore, we are happy to negotiate rates with other professionals so that we obtain the most competitive fees for our clients. Our Trusts consist of more modest trusts to large multi-million-pound trusts but in each case, the client receives a personal and professional service.

We arrange for investments to be held in the Trustees name, alongside a Trust bank account, so that the income from the investments can then be transferred into the Trust bank account.

The beneficiary will need to ensure that their own personal account does not go above £6,000 as once again this would affect their entitlement to means-tested State benefits.

Therefore, if you receive an inheritance or win money on the lottery this cannot be paid into a personal injury trust.