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Personal Injury Trusts - VWV Solicitors

Personal Injury Trust

Five Reasons Why You Should Hold Your Compensation in a Personal Injury Trust

Have you received compensation from a personal injury or medical negligence claim? If so, you should consider setting up a personal injury trust to protect this. 

Please see five good reasons to set up a personal injury trust below as well as some personal injury trust FAQs.

  1. Future Care Costs
  2. Planning for Inheritance Tax
  3. Means-Tested Benefits
  4. Protection on Divorce
  5. Safeguarding Your Compensation for the Future

1. Future Care Costs

As we live longer, it becomes more likely that we will need assistance with our care. The ever-increasing costs of care mean that many will need to seek Local Authority assistance with payment of the fees.

If your compensation is held in a personal injury trust , you can receive Local Authority funding and still benefit from the funds held in your trust.

By comparison, if the compensation is held in your own name, you may need to use the compensation funds towards the cost of your care.

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2. Planning for Inheritance Tax

As house prices increase many more estates will suffer the burden of inheritance tax.

If your compensation is placed into certain types of trust it will not be included in your estate for inheritance tax purposes after seven years.

By comparison, if you hold the compensation in your own name, the value of your estate will be increased, and the tax payable on your death may be greater as a result.

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3. Means-Tested Benefits

If you or your partner are claiming any type of means-tested benefits, or might wish to do so in the future, and the compensation is held by you personally, you may lose your entitlement to benefits.

If the compensation is placed into a personal injury trust, it is entirely disregarded in the calculation of your entitlement to benefits. The trust funds can be used to pay for expenses such as cars, holidays and household goods.

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4. Protection on Divorce

The person who was intended to benefit from the compensation award is you. On divorce, all the financial resources of each party can be taken into account in determining how the assets are divided.

If your compensation is clearly ring-fenced and held in a personal injury trust, it will be easier to argue that the fund should be retained by you, and not included in the pot of assets to be divided.

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5. Safeguarding Your Compensation for the Future

Your compensation was awarded taking into account your future needs. You may come under pressure from family or friends to use the funds to benefit others. The trustees of a personal injury trust can help to protect your compensation, so that it is set aside to meet your needs, whatever the future may bring for you.

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Frequently Asked Questions

We can advise you on choosing, setting-up and the ongoing running of a personal injury trust. Please contact Shelley Faulkner on 0117 314 5423 or make an enquiry below.

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Meet the Team

Our extensive legal expertise enables our personal injury solicitors to recover millions of pounds in compensation every year, whilst at the same time providing a friendly and approachable service to clients nationally.

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Jan Markland - Head of Personal Injury Claims in Bristol -VWV Law Firm
Partner
Mandy Yeandle - Personal Injury Claims Solicitor in Bristol - VWV Law Firm
Senior Associate
Dan Thompson - Personal Injury Claims Solicitor in Bristol - VWV Law Firm
Senior Associate

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