If you have received or are waiting to receive compensation from a successful personal injury (PI) claim such as an accident whilst driving, an accident at work or clinical negligence, you can protect it by setting up a compensation protection trust.
This type of trust can protect the compensation you receive without restricting your ability to access the funds if you also claim means-tested benefits or need support for residential care from the local authority.
Even if you do not currently claim means-tested benefits, we never know what the future might hold and anything can occur to mean you may need to access them in the future.
Means-tested benefits can include:
- Residential care from the local authority
- Income support
- Job seekers allowance
- Employment support allowance
- Pension credit
- Housing benefits
- Council tax
How do compensation protection trusts work?
Funds held within a trust of this type are accessed and managed by 'trustees'. Trustees are usually yourself, spouse, partner or even a solicitor. The trustees hold the money on the rest for the person that Will benefit from the trust (also known as the beneficiary).
You Will have 52 weeks from the date that your first compensation payment to set up your trust to ensure that the compensation funds are not taken into account when being assessed for your means-tested benefits. It is still possible to set up the trust after this period, however, you Will not be able to retrospectively claim for means-tested benefits during the 52 weeks.
What happens to my compensation protection trust if I pass away?
If you die, any remaining funds in your compensation protection trust are included within your estate.
This is another reason why it's vitally important to write a Will to ensure that the remaining sum is divided between your beneficiaries in line with your wishes. Should you not have a Will in place it Will be shared according to intestacy law.
How to set up a Will and include a compensation protection trust with Wills Services
If you would like advice about how to set up and include a compensation protection trust in your Will, our team of legal professionals are here to help you and discuss the possible routes you could take to help secure your family’s financial stability (and your own).
Just click the button below and fill in some simple details for us to get in touch with you to discuss your needs further.
