Personal Injury Trusts - What you Need to Know

Personal Injury Trusts

If you have suffered an injury and are due compensation, opening a Personal Injury Trust is a secure way to protect your means tested benefits and local authority funding claims. By ringfencing the damages, you can be safe in the knowledge that you can continue to make the claims you are entitled to.

Whether you are in England and Wales, our experienced team at BBH are here to make the process as simple and hassle-free as possible; we will handle the drafting of your Trust Deed for a bank account and make the necessary notifications to the DWP about your Trust. Complete the enquiry form following the link below and a member of our team will be in contact to answer any questions that you may have.

Click here to send an enquiry to our Court of Protection Personal Injury Trust Team

 What is a Personal Injury Trust ?

A Personal Injury Trust (PIT) allows you to ringfence damages arising from a personal injury claim. This means that you can continue to make a means tested benefits claim at your current level without the fear of them being denied. Opening a PIT also provides the following protections:

Ringfencing the damages for local authority care funding
Ringfencing the damages for care home fees
To hold property
Adding that extra layer of security for your money thanks to the Trustees

If you are not currently on any means tested benefits, placing the damages into a Trust will future proof the money should your circumstances change as well as providing the benefits listed above.

How long do i have to open a pI trust ?

 

Whilst there are no deadlines to put your damages into a Trust, it is always best to ringfence the damages sooner rather than later. After the first payment from the defendant has been made, whether an interim or final damages, you have a period of 52 weeks where the money is disregarded for any ongoing means tested benefits claims. If you hold onto the damages after this period has elapsed, your means tested benefits can be affected until they are ringfenced in a PIT.

How do they work ?

Unlike regular banking accounts, the Trust needs to be operated by a minimum of two Trustees. You can name yourself as a Trustee, meaning that you then only need one other individual to operate the account. As a result, all payments from the Trust are made via online banking or cheque where payments are raised by the Beneficiary (you) and authorised and signed by your Trustees

 

Who can Be a Trustee ?

Anyone can be a Trustee, but there are a couple of qualities that are important to think of when making your decision. You first want to make sure that the Trustee(s) that you have chosen are trustworthy as you are inviting them into your financial life. The second aspect of a Trustee that you want to ask yourself is: are they are easily contactable? As payments are made via cheque and online banking, you want to make sure your Trustee(s) will be available to perform their duties in a timely manner.

As a result of these two factors, many clients have elected family members or close family friends to act as Trustees. You can always add or remove Trustees later, but this does incur a charge and so it is best to take your time thinking about your Trustees in advance.

What can i spend the money on ?

You can spend the money as you need, but all payments need to be authorised by your Trustees. The money was awarded for your needs, whether that be for ongoing therapies or home adaptations resulting from the injury, or any ongoing care needs. Should you wish for further advice on what the money can be used for, as well as general financial advice, we can put you into contact with an independent financial advisor who are in the best position to assist you.

Can I purchase property from the trust ?

 

Yes, you can purchase property from the Trust and there are benefits to purchasing property this way. One of the main benefits is that it protects the home from third party claims as might arise if the beneficiary (you) were to ever need long term residential care. It is important to note, however, that the property would be owned by the Trust and not yourself. If you are thinking about purchasing a property from the Trust, our Conveyancing team will be able to assist once the account is open.

Click to Send an Enquiry to our Conveyancing Teams 

what happens to the money when i die ?

Upon your death, the Trust will dissolve and money will fall into your estate and the regular rules of probate apply with your Will or the rules of Intestacy dictating who and where your money goes to. If you do not have a Will or have not updated it in a while, we can help and put you into contact with our very experienced Wills & Probate team.

Click to Send and Enquiry to our Wills & Probate Teams