Setting Up A Trust
A trust is a legal document where individuals or a company, control assets or money, known as trust property, for the benefit of one or more people. Victoria Payne and Sarah Inman, solicitors in BRR Law’s Wills and Probate department, can assist you with setting up a trust and with the ongoing administration.
What Is A Trust Used For
Trusts can be used for a number of reasons such as:
- To protect and control assets
- To pass on assets either when you are alive or after you have died (a will trust)
- Safeguard assets for a minor or incapacitated beneficiary
- Estate planning
Who Is Involved
- Settlor – person who sets up the trust
- Trustee – manages the assets. This can be anyone you trust, over the age of 18 years. Some clients will appoint a solicitor as a professional trustee
- Beneficiary – the person who benefits from the trust
There are a number of different types of trust. The main ones this firm deal with are:
- Bare trusts
- Interest in possession trusts
- Discretionary Trusts
The options for your trust can be discussed at your appointment.
We also work closely with the Personal Injury and Medical Negligence department in setting up Personal Injury Trusts.
Personal Injury Trusts
What is a Personal Injury Trust?
A Personal Injury Trust is created by you when you sign a special document called a ‘trust deed’.
It states who must look after your compensation on your behalf. The people who look after it are your ‘trustees’ and you can choose them. A trust deed also explains how the money is to be invested and otherwise looked after for your benefit.
What if I receive means-tested benefits?
If you do not set up a Personal Injury Trust then the value of your award and any income generated from it will be considered as assessable capital and income. This can alter your entitlement to means tested benefits.
Awards held with Personal Injury Trusts are ‘disregarded’ capital for means testing purposes.
I don’t receive means-tested benefits why would I need one?
However, even if you are not currently receiving means tested benefits, you should still consider whether a Personal Injury Trust may be helpful to you.
You may end up receiving benefits in the future, or there may be other considerations to take into account. For example you may;
- Be wary of the responsibility of handling a large sum of money
- Not want to concern yourself with financial administration
- Want to ring fence your resources from divorce or separation
- Want to protect against the cost of long term care fees as you get older
What do I do next?
Setting up a Personal Injury Trust should be considered as soon as possible. They take time to set up and an account must be created in the name of the trustees
As soon as an interim payment or a single final payment is made then you will lose any current entitlement to means-tested benefits. The Personal Injury Trust should therefore be set up and ready to go well in advance of any payments being made [even if the interim payment goes to a third party for example legal/medical fees] .
In any event, you will need time to decide what you want to do and who you want to appoint as trustees. You will need to appoint at least two trustees. This can be a family member or a friend. Some clients will appoint a solicitor as a professional trustee.
Financial advice should also be taken at an early stage if necessary.
Please contact us as soon as possible to arrange an appointment.