Personal Injury Trusts
Posted: Saturday 8 May 2010
Personal injury trusts are a hot topic in the financial press at the moment, and for valid reasons. The availability of these trust arrangements can really help those in a vulnerable position who are in need of long term financial management.
In basic terms, a personal injury trust is a way of managing money received as a result of a personal injury action. The money could have been obtained through a settlement with an insurance company, or from an award made by the Court.
The real advantage lies in the fact that the money held in a personal injury trust and the income it earns is not taken into account by the Department for Work and Pensions for the purposes of means-tested state benefits. Normally, having capital over a certain limit (which varies from benefit to benefit), or income above a certain level, would disqualify entitlement.
Personal injury trusts are a vital tool for replacing income and maintaining capital, to make any award work as well as possible for the individual involved, and their family. The trust arrangement can be set up in a straightforward manner and it is not an expensive process. Certain strict time limits are set out in the applicable legislation, so it is important to consider the use of personal injury trusts at an early stage of the action.
