Personal Injury Trust

Discussion in 'Finance, Property, Law' started by Litotes, Dec 20, 2010.

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  1. I spotted this article in the Financial Times dated 11 Dec 10:

    FT.com / Advice & comment / Wealth questions - Wealth Questions: How can we protect injury payout?

    The FT gets shirty if people cut and paste so you should visit the site if you, a friend or a member of your family are likely to need advice on managing a large sum of money awarded after an injury incurred during ops, trg or any accident.

    The bottom line is that this area is tricky, especially if you want to protect your right to means-tested benefits, and you should take legal advice. The advice in the FT was provided by a firm of solicitors.

    If my link does not work, search the FT.com website for "Personal Injury Trust" or "Ambrose Appelbe".

    Litotes
     
  2. Good call - last thing I'd want to see is tax man and Benefits people clawing money out of someone's compo.
     
  3. Seems a little pointless to me. A good financial advisor will steer you through the tax maze, ensuring the best return.

    Face it, you're going to pay tax regardless, it's just how little you can get away with paying.

    As for benefits, again the thresholds are often so low (the highest I'm aware of is £23k) that it's really not practicable if you want to live. However, there are others that don't have a threshold - I.E disability living allowance.
     
  4. ""
    ""

    Dingerr you've missed the point entirely, I've been involved in setting personal injury trusts up for over ten years, many for amed services personnel. You are confusing the issue by talking about tax, they have nothing to do with tax. Personal Injury Trusts are all about maintaining elligibility for means tested benefits, usually the benefits we are protecting are not income support or housing benefit or any of the other bits and pieces that add up to around £1000 a month, its the elligibility for help from the local authority, ie for example them giving you direct payments that you use to employ two or three carers to come round to the house and care for you. That is worth a lot of money and shouln't be sniffed at. A typical care package could be £10k per annum, I have critically injured clients who require 10 times as much and if we had not set the trust up theyd have lost all their compo paying for the carers themselves. There are very few people who know what they are talking about in this area, I know of 4 IFA firms of which mine is one. Chances are any old "good" adviser just isnt going to cut it. Ive seen people lose benefits because their adviser told them to open an ISA, it really is that specialist. There is so much more to think through and every case is different. You mustnt make general statement along the lines of "why bother". Think about this, when you go into an old peoples home they can take your house to pay the fees, they cant take your personal injury trust. Still think they're worthless?
     
  5. Would the Guaranteed Income Payment prevent personnel from receiving these payments?
     
  6. Long winded answer when it comes to GIP, bear with me

    Under the old rules War Pensions were not counted for means testing. What actually happened was that they based the legislation on the industrial injuries benefits rules and so war pensions were exempt. End of issue, dead simple.

    However

    In 2005 when the AFCS was set up to take over, one of the issues was that they based the new rule book on the tax credits system legislation. The tax credit system unlike industrial injuries does take into account the GIP. Of course nobody paid attention because all the limits went up at the same time so everyone was better off and with the recent doubling of lump sums it is again something that gets over looked.

    But

    Whether AFCS payments are to be means tested was one of the main points raised in the 2010 AFCS review see page 30 of the review document at this link http://www.veterans-uk.info/afcs_review/20100209-AFCS%20Review%20Report%20Cm%207798-U.pdf make no mistake, means testing is one of the elephants in the room when it comes to AFCS payments.

    In short

    The review ducked the issue, its recommendation is to keep the situation under review regarding how AFCS payments interract with other benefits entitlements, though it welcomes local authorities decisions to disregard AFCS payments on a discretionary basis (section 2.28 of the review)

    Which means the issue is

    It depends on the type of benefit you are claiming for, if we go back to care for a severely injured veteran, if it is nursing care, then that is provided for free and GIP is irrelevant. But, if it is domicilliary care (cleaning cooking etc) which in my experience is what veterans with serious but stable injuries need for 10, 20 & 30+ years in order to continue to live independently, then, it is down to the discretion of the local authority as to whether they pay for care and their discretion is exercised by whether they take the GIP income into account on the basis that the lump sum can be taken out of the assessment by placing it in a personal injury trust.

    Here's where it gets muddy, the local authority also use social security means testing rules though they have the right not to. What local authorities tend to do is assess veterans on whether they are already receiving a means tested benefit (known as a passport benefit) if they are then the local authority will usually do the decent thing and pay for care on the nod as you are treated as already having been assessed.

    Finally, have a look at the following really useful link which shows how GIP interracts with current benefits.
    http://www.veterans-uk.info/pdfs/afcs/table_of_benefits.pdf

    As I put in the first post, every situation is different and it really depends on what your prognosis is, what you are claiming for, what you can claim for, from which local authority and what rules they use to assess you, what their budget is like at the time you ask for help and what their internal policy is on AF personnel climants (or even if they have one).
     
  7. Apologies for my first post, it was written in reference to my own situation where my GIP will be way above the 23k threshold that appears to be for those means tested benefits that apply to my situation.

    I'm not greedy though and fully understand that benefits should be for those in need and I'm not goingto cry if the regulations prevent me from receiving a certain benefit. That said I will always claim what I'm entitled to.

    It seems a very complex answer with regards to GIP. I am learning more and more that financial institutions out there have difficulty understanding my incoming as a serving injured soldier and my projected income once I leave the service and receive GIP.

    With regards to the Persnal Injury Trust what or who is the best resource to direct my financial advisor to. I would prefer he continued to deal with me financially and is a trusted friend, besides that, if what appears to be a simple question about GIP throws up the answer you posted, I'd rather he looked at it first.