If you have been awarded a substantial sum for a personal injury suffered in an accident that was not your fault, you may want to set up a personal injuries trust. Many people ask; how do I open a personal injuries trust? and most seek expert advice from a personal injury solicitor or a financial adviser. The solicitor who helped you win your compensation award should be able to provide the answer to your question: How do I open a personal injuries trust?
Why should I open a personal injuries trust?
The pertinent question here is not how do I open a personal injuries trust, but why should I open one? The answer is that if you have been awarded a substantial compensation payout, and you are receiving state benefits, some of those benefits are means-tested and so may stop once you have received compensation. However, if you open a personal injuries trust, this is not means-tested and you can continue receiving benefits. Without a personal injuries trust, you could be worse off financially after being awarded compensation.
Means-tested state benefits are listed below and include:
- Income Support
- Housing Benefit
- Council Tax Benefit
- Working Families Tax Credit
- Disabled Person’s Tax credit
- Income-Based Jobseeker’s Allowance
- Employment and Support Allowance
You may have your benefits reduced if you have a lump sum of £6,000 and they may stop if you have over £16,000. If you have reason to think that you may need to have residential care in the future, then setting up a personal injuries trust is a way of preventing the money from being taken away by the local authority as payment for your care.
How do I open a personal injuries trust?
You need two people (usually one of them will be you) over the age of eighteen to act as trustees. The second person could be a family member or a solicitor. A solicitor will draw up a Trust Deed for you to sign along with the other trustee you have appointed and your signatures will need to be witnessed by another person over the age of eighteen. You then take the deed or a certified copy to a bank or building society and open an account which should be in the names of the trustees. The account should be in the name of “the trustees of (your name) Personal injury Settlement.”
If you have been awarded a substantial sum, then you should ideally seek the advice of an Independent Financial Adviser.
Accident Advice Helpline
If you need advice about setting up a personal injuries trust, then you could contact us at Accident Advice Helpline. We are a law firm that has been helping people with all aspects of personal injury compensation claims for more than ten years.
Why not call us for expert legal advice on one of our freephone numbers? Call 0800 689 0500 from landlines or from mobiles, 0333 500 0993. You can call right now whatever the time or day, so why not give us a ring?
Date Published: 26th October 2013
Author: Louise Thacker