Personal Injury Trusts Q&A18-Oct-2018

Phil Appleby (Associate Solicitor & Trust and Estate Practitioner in our Wills, Trusts & Estates Team) answers some frequently asked questions about Personal Injury Trusts:

 

If I receive compensation for a personal injury claim, might it affect my benefits?
Yes. If you receive compensation then it may well reduce your entitlement to certain means-tested benefits if it takes the cash you have at your disposal above £6,000. Your means-tested benefits could stop completely if you have cash of more than £16,000 at your disposal.

Which benefits could it affect?
Any means-tested benefit, including Employment Support Allowance, Housing Benefit, Income Support and Income-Based Jobseekers Allowance.

What can I do about this?
The government recognises it is unfair for someone to lose their benefits just because they receive compensation for personal injury. The law therefore allows you to receive compensation and keep your benefits by creating a Personal Injury Trust.

What is a Personal Injury Trust?
A Personal Injury Trust is a legally binding document that names one or more trustees, who have a duty to look after your compensation for you. They will be responsible for holding your compensation in a bank account in their names, but it still belongs to you as the beneficiary of the Personal Injury Trust. With your trustees’ agreement, withdrawals can be made from the trust at any time. So long as your compensation remains within the Personal Injury Trust, it will not affect your right to means-tested benefits.

Who can I name as my trustees?
Anyone over 18 who you trust to act on your behalf in your best interests. Clients often appoint family members, friends or a solicitor.

Do I need to use the solicitors who deal with my compensation claim to set up a Personal Injury Trust?
No, you are free to use any firm of solicitors.

Why should I use Cullimore Dutton?
We have one of the largest Wills, Trusts and Estates teams in Chester and are experienced in advising regarding trusts of all descriptions, including Personal Injury Trusts. We can help you to:

  • Decide whether a Personal Injury Trust is right for you and, if so, prepare the necessary legal documentation.
  • Decide who to name as your trustees
  • Open a suitable bank account.
  • Inform the Department for Work and Pensions (DWP) and/or your local authority about the Personal Injury Trust.
  • Run the Personal Injury Trust once it has been set up, to ensure you continue to receive your means-tested benefits.
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    For more information about Personal Injury Trusts, please contact a member of the Wills, Trusts & Estates Department at Cullimore Dutton Solicitors on 01244 356 789 or email info@cullimoredutton.co.uk

    Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.