Trust Bank Accounts

Mumum

Hello, I am in the process of setting up a Trust Fund in order to maintain my eligibility for benefits.

I have finally set up the trust deed and must now set up the account. Does anyone have any advice on this? There are so many different types of bank accounts and I am getting confused. I do not intend on using this money, it will be left for my son’s future. I have been looking online to get an idea of interest rates (I’ve been advised that NatWest and Barclays are the most helpful and knowledgeable when it comes to trusts) but am not making much progress.

Thank you!

xylophone

The Trustees of the Trust need to open the bank account.

https://www.markthompsonlaw.com/best-bank-or-building-society-account-for-personal-injury-trust/personal-injury-trust-to-protect-personal-injury-compensation/

Mumum

Yes I know how the trust works. I will be doing all the research though.

Mumum

In case anyone else in my situation reads this thread, it may be helpful for me to let them know that the banks have their own trust accounts eg Barclays has two which can he used for trusts and NatWest has one, so you cannot just randomly choose any account eg the high interest one. I am also looking into bonds as the interest rates at the moment are rubbish eg 0.25% paid annually at Barclays and nil at NatWest!

If anyone knows anything about putting trusts in bonds then please do advise or share your feedback experience as I’m completely new to bonds.

Thank you!

xylophone

https://www.markthompsonlaw.com/personal-injury-trust/personal-injury-trust-to-protect-personal-injury-compensation/

Have you read the FAQ in the above?

You mention that you are using this solicitor - have you discussed the matter of accounts with him?

Has this been set up as a bare trust?

If so, you realise that any income/interest is taxable on you?

What exactly do you mean by "bonds"?

SeniorSam

Presumably money will be gifted to the Trust and it is for the Trustees to invest into whatever they wish in the Trust for the beneficiary/ies. A Trustee bank account can be used for some of the capital, but Trustees can invest into a variety of investments that they are responsible for administering during the term of the Trust. What type of Trust have you set up and how many Trustees are there? Can you explain what you mean by 'maintain my eligibility for benefits' ?

Malthusian

SeniorSam wrote: »

Presumably money will be gifted to the Trust and it is for the Trustees to invest into whatever they wish in the Trust for the beneficiary/ies.

The OP's other thread reveals it's money that has been awarded by a court as compensation for medical negligence.

Can you explain what you mean by 'maintain my eligibility for benefits' ?

Personal injury awards for people on benefits are often made into a trust to ensure that the compensation doesn't effectively go to the Government by disqualifying the recipient for means-tested benefits. *edit* Probably teaching you to suck eggs given your signature, I'm guessing that question was aimed at eliciting more information from the OP.

The OP has not disclosed details of the trust but [STRIKE]I'm guessing it is something like a discretionary trust with at least one other potential beneficiary so the OP doesn't have an automatic right to the capital.[/STRIKE] My guess was wrong due to lack of experience of personal injury trusts, see below.

The OP has said they view the money as being for their child's future (who is 13) rather than their own needs. So if the bulk of the money is going to be spent in around 5-10 years' time when he reaches majority, it may be worth considering investment rather than cash. That said, he will be 18 in five years' time and it is perfectly possible for a diversified investment to make a loss over a 5 year time period (unless you wait a bit longer). So it is a tricky balancing act that can only be resolved with knowledge of the OP's exact goals and those of her son. And ultimately it is the trustees' decision.

SeniorSam

Thanks malthusian. I had not see that this was an award already, which clarifies a couple of points. I hope that it is a Discretionary Trust rather than a Bare Trust as getting access to large sums at an early age can sometimes be a worry.

Malthusian

I imagine so. It won't be a bare trust in the son's name as the OP has said in her other thread that it wasn't an option - she suffered the negligence so the award had to be made to her.

And making the award to her which she then gave into bare trust for her son wouldn't have worked as it would have been deliberate deprivation.

Mumum

Thank you Malthusian, you have answered all SeniorSam’s questions for me!

It is a bare trust which has to be for me as it was my injury (therefore I was not allowed to put it in trust for my son). While I am alive, however, I will only be withdrawing the money for my son’s benefit, which I am hoping may go towards a mortgage or college/university etc). In the case that I die, the trust will collapse and the money go into a discretionary trust for my son (I have yet to set that up). A lump sum would most definitely be it advisable at that age!

Mark Thompson, the solicitor who set up my trust, is fantastic and he advises putting the money into the trust account first (a current account) and then think about further investments. My predicament is that the three trustees which I have (I am not one of them, it took me a long time to decide but it was advised that it would be better for benefit purposes if I weren’t) are not close friends or family (I have none - violins!) so I do not want to burden them with having to all get together (they don’t know each other though will obviously meet to set up the trust account) to set up different investments, which will require form filling, ID, appointments etc. In truth they are just kind, responsible (and trustworthy) who are helping me by providing their names so that I may actually gain from the compensation money.

My son only has me. If I die he goes into care. The NHS misdiagnosed my cancer leading it to spread to stage 3. I have a good chance of survival at 85% but that 15% still equals many 1000’s of women so it’s important for me that the money is there for him, just in case.

Mumum

I sent my previous message too early. I had meant to add, I am hoping to put the money directly into bonds etc inorder to avoid inconveniencing the kind ladies who are helping me any further.

Someone asked me why I was thinking of bonds? Simply because I read somewhere that trust money is often put in bonds. I thought I might get more interest. I believe any interest still forms part of the trust rather than my capital? I need to look further into this.

I am also confused whether I can indeed put the money directly into a bond or if it has to go into a current account first.

Infact I’m confused all round. Mark Thompson does not expect payment until the account is set up and I have emailed him with some questions but he’s not a financial adviser, I thought messaging on here would be quicker and reach more people.