Protect Your Future With A Personal Injury Trust
Understand The Benefits of a Personal Injury trust
What Is An Personal Injury Trust?
A personal injury trust is a legal document that is used to protect money or other assets when someone receives a personal injury settlement. This trust is designed to provide financial security and protection from creditors. It also allows your settlement to be protected while you receive means tested benefits or other government benefits .
Why Create A Personal Injury Trust?
Creating a personal injury trust can be the difference between financial security and future hardship. It ensures that any money or assets you receive from your settlement are protected and safe. It also ensures that you will not be at risk of losing your settlement money to creditors or other debtors.
The Benefits of A Personal Injury Trust
A personal injury trust can provide numerous benefits, including: protection from creditors, protection of your settlement funds, and the ability to receive government benefits without fear of losing your settlement. It also ensures that your money will be secure and accessible to you in the future.
Key Features of Personal Injury Trusts
Professional Trust Management
The personal injury trust is managed by a team of professional trustees who have vast experience and expertise in managing trusts. They ensure the trust is set up and managed to meet the specific needs of the beneficiary.
Flexibility of Payments:
The trustee can make payments to the beneficiary at any time and for any purpose, as long as it is in the best interests of the beneficiary. The trust can also be adapted to meet changing circumstances and needs of the beneficiary.
A personal injury trust provides significant taxation benefits for the beneficiary. The trust income is not subject to income tax, and the beneficiary may avoid Inheritance tax (IHT) at death. This means the beneficiary can keep more of their compensation.
Benefits of Personal Injury Trusts
Peace of Mind
A personal injury trust provides the beneficiary with full control and security of their compensation. This is important as it helps to ensure that the beneficiary has peace of mind, knowing that their compensation is safe and secure for their lifetime.
Protection of Means-tested Benefits:
A personal injury trust can help to protect the beneficiary's means-tested benefits. Without a trust, the compensation would likely affect the beneficiary's eligibility for benefits such as Housing Benefit and Council Tax Reduction.
Long-term Financial Security:
A personal injury trust can provide the beneficiary with long-term financial security. With professional trust management, taxation benefits, and flexibility of payments, the trust can provide a sustainable and reliable source of income for the rest of the beneficiary's life. This can help to alleviate financial stress and uncertainty, and give the beneficiary the ability to plan for the future with confidence.
Top Six FAQ's About Personal Injury Trusts
What is a Personal Injury Trust & How Does it Work?
A personal injury trust is a legal arrangement that allows an individual to store and manage money received as compensation for a personal injury. The trust is set up with the help of a solicitor, and trustees are appointed to manage the trust on behalf of the beneficiary. The funds held in the trust can be used to pay for the beneficiary's ongoing care needs, without affecting any means-tested benefits they may receive.
Who Is Eligible To Set Up A Personal Injury Trust?
Anyone who has received a compensation award for a personal injury is eligible to set up a personal injury trust. This could include those who have been involved in accidents at work, suffered slips and trips, or made claims for criminal injuries.
How do I go about setting up a personal injury trust?
To set up a personal injury trust, you will need to speak to a specialist who has experience with trust law. They will be able to guide you through the process, including selecting trustees and drafting the trust deed. It is important to ensure that the trust is set up correctly, to avoid any potential issues with the management of the funds. We at ONCE Wills and Trusts can assists you with this.
Can I access the funds in a personal injury trust at any time?
The funds held within a personal injury trust can only be used for specific purposes, such as paying for the beneficiary's care needs. However, if there is a genuine need to access the funds for something outside of these purposes, it may be possible to request permission from the trustees
Will setting up a personal injury trust affect my eligibility for government benefits?
If the personal injury compensation received is used in a way that contravenes the means-testing rules for certain government benefits, such as Medicaid, it can affect eligibility for those benefits. However, if the funds are held in a personal injury trust and used properly, it will not affect eligibility for means-tested benefits.
What are the tax implications of a personal injury trust?
Personal injury trusts can have tax implications, so it is important to seek advice from a professional tax advisor. However, in general, any income generated by the trust is likely to be subject to income tax, while assets held within the trust may be subject to inheritance tax upon the beneficiary's death.