Personal injury trust fund

LisaB85

My parents are setting up a personal injury trust fund, I have read the deeds but have no idea what they mean to be honest. Can anyone explain in plain English how this will work?

The fees to set the trust up are being paid by the other side, is their a further fee to pay? as at the bottom of the letter it states a quarterly fee of 0.625%

Will they need to pay tax on the amount in the trust?

I assume they need to speak to the company opening the trust about this but to be honest they will struggle with it more than I am.

greenface

Not even close to any advice here but i cannot understand the question. Has someone been awarded payment or compo due to personal injury is it your parent or are they doing it for you ? Have you been injured ? Is it much money?? If you have been represented by a solicitor due to a payment they could assist you setting up (but not recommending IIRC)See a IFA one thats been recommended or see a few and learn from each. They will need to work out their tax status to see if tax is needed to be paid but they will still be entitled to benefits and allowances due to it being placed in a trust . Good luck and someone will be along shortly to shoot me down probs X

LisaB85

greenface wrote: »

Has someone been awarded payment or compo due to personal injury is it your parent or are they doing it for you ? Have you been injured ? My stepdad is being awarded comp after an accident in 2006

Is it much money?? Just over 20k

If you have been represented by a solicitor due to a payment they could assist you setting up (but not recommending IIRC)See a IFA one thats been recommended or see a few and learn from each.
Their solicitor has set the wheel in motion all my parents need to do is sign but they asked me to look, I understand about protection of benefit and intitial fees but the deeds are hard to understand and not sure on what fees exactly will apply other than set up fee

They will need to work out their tax status to see if tax is needed to be paid but they will still be entitled to benefits and allowances due to it being placed in a trust . Good luck and someone will be along shortly to shoot me down probs X

Answered in red, I didn't write it very well as don't have the paperwork to hand.

BLB53

I don't understand why there is a need for a trust fund. Why can't you stepdad get a cheque for the compensation amount and he can then invest it as he sees fit?

mildred1978

BLB53 wrote: »

I don't understand why there is a need for a trust fund. Why can't you stepdad get a cheque for the compensation amount and he can then invest it as he sees fit?

So that he can keep claiming full benefits

xylophone

If you type "personal injury trust" into Google you'll find plenty of information.

newbie1980

mildred1978 wrote: »

So that he can keep claiming full benefits

sorry but why should someone who is getting 20k keep his full benefits
why doesnt he live on the money and when below the limit again claim again

greenface

Neither know or need to his background....BUT... . Does he need a trust fund ? 20k is alot of money esp if your dads on benefits. Are there any debts he can clear or pay some off if they are adding interest on. (have to be real debts btw)I understand you & your protecting his award from being over the threshold for benefits but i am sure access is then limited to it . A car upgrade or holiday for health reasons & clear the odd bill would take them below the radar anyway. If you employ a legal person or IFA to set up please check any charges well .

greenface

newbie1980 wrote: »

sorry but why should someone who is getting 20k keep his full benefits
why doesnt he live on the money and when below the limit again claim again

Because if done properly they can .... we dont make the laws but we do try to live within them. You google it too.

http://www.personalinjurytrusts.co.uk/
edit --thank me in the morning

LisaB85

newbie1980 wrote: »

sorry but why should someone who is getting 20k keep his full benefits
why doesnt he live on the money and when below the limit again claim again

Because he is on benefits and in debt due to the accident, neither him or my mum are capable of spending wisely the rent would go unpaid etc then they are likely to deprivate their capital.

They wouldn't be allowed to buy a new car, holiday, pay debts off then claim once it is under 16k.

greenface

Yes they can .& If they have debts it could be a good plan (they wont have a lump some but it could be a good time to have more money in their pockets)