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Mythbusters guide to: Personal Injury Trusts

Myth #1

If I spend my compensation sensibly, I don’t need a Personal Injury Trust

A Personal Injury Trust offers additional security and invests your compensation to provide you with an income and capital growth (where value increases over the years).

A Trust is like a bank account where your compensation is paid. Trustees – the people managing the Trust – follow strict legal and investment rules on how they look after it. They help decide how and when to pay compensation to enhance your quality of life; and sort out tax affairs.

Myth #2

If I get a large compensation pay-out, I’ll stop receiving state benefits

Benefits protection is a common reason for setting up a Trust, as it protects your entitlement to claim benefits if you cannot work following your injury.

Even if you don’t claim now, a Trust may protect your ability to claim benefits in the future (if this looks likely). As if your savings are too high when you need to start claiming, you may not be entitled.

Myth #3

I can wait and decide to set a Trust up later

Yes, but you only have 12 months to decide whether to protect your compensation with a Personal Injury Trust. This 12 months starts the day you receive any pay out, even if just an interim payment.

Myth #4

I can be a trustee for my own Trust

No, but we recommend two trustees are family members or friends. A trustee doesn’t have to be a professional, but they do offer knowledge, experience and impartiality. You can opt to appoint two Hatch Brenner Partners as Trustees.

Myth #5

Setting up a Personal Injury Trust is expensive

No. Our charges to set up the Trust are just £500 plus VAT, though we charge more if acting as Trustees. We can help with the Trust’s yearly management – such as filing income tax returns, reviewing investments and giving further advice.

Costs depend upon the type of Trust you need, which depends upon the benefits you claim. An initial telephone discussion about your circumstances is free of charge.

For more information and advice on this topic, contact Colin Cook, Partner and Personal Injury Specialist on 01603 214 210 or colincook@hatchbrenner.co.uk

If you would like further information about any service, call us on 01603 214220