Compensation and benefits

Stacers12

Hi there,

my mum was awarded some compensation money from the NHS after catching a super bug in hospital which left her on incapacity benefit and disability living allowance, she will never be able to work again.

She set the money up in a trust fund so it wouldn't affect her benefits, this cost her £750, the bank have now closed her trust fund saying they can no longer keep up with the admin it requires to keep the account open as she is no longer aligned to a solicitor?

Rather than paying out for another trust fund she would like to give the money to myself and my sister to go towards a deposit for a house, does anyone know the implications this would have on her benefits, can she just give the money away or not?

Cheers!

mynameistallulah

The purpose of a trust is to benefit the disabled person. Once the money is taken out of the trust and given to other people it will fall under the normal capital rules, and your mother would be treated as if she still had the money.

Dunroamin

mynameistallulah wrote: »

The purpose of a trust is to benefit the disabled person. Once the money is taken out of the trust and given to other people it will fall under the normal capital rules, and your mother would be treated as if she still had the money.

Except that IB and DLA aren't means tested.:)

mynameistallulah

Dunroamin wrote: »

Except that IB and DLA aren't means tested.:)

I know! I assumed the mother must be receiving HB, CTB etc, otherwise the monies would not need to have been put in a trust.

xylophone

the bank have now closed her trust fund

How could the bank wind up the Trust? What do the Trustees have to say?
http://www.lindermyers.co.uk/personal-injury-trusts---some-faqs_754.html