| What is a PIT?
If you currently receive means tested benefits and are due to receive a compensation payment for an injury, you may lose some or all of your entitlement to the benefits if your capital goes above the capital limit. Placing a compensation payment into a Personal Injury Trust (PIT), means that it will be completely disregarded when calculating your benefit entitlement.
To be able to set up a PIT, the compensation payment must be from a personal injury such as: an accident at work, a road traffic accident and a criminal injury. Additionally, the trust must be set up wholly or partially for the benefit of the injured person.
A PIT must be set up within 52 weeks of first payment (the one-year disregard period), as the compensation payment will not be taken into account under the means test within the first year.
The best time to set up the trust is before your settlement payment, to ensure everything runs as smooth as possible when the payment has been made.
The Trustees of the trust will be the legal owners of the funds and can control how they are used and invested. If the funds are to be paid out or used in any way, it should only be for your benefit.
| Who are the Trustees?
In order to have a valid trust there must be at least 2 trustees and you can appoint up to 4.
It is wise to choose trustees who are trustworthy and have the ability to manage your funds effectively, in some cases the compensation payment may be large, and your Trustees will require the relevant expertise to deal with such payments.
You can appoint professional trustees such as a Solicitor, who can provide you with tailored advice when setting up a trust and will act independently to ensure the funds are managed in a way that reflects your best interests and care.
| Cost of setting up a trust
Our fee for setting up a PIT is from £400 plus VAT, the solicitor will create the Trust Deed which sets out the rules and obligations concerning the PIT and provide advise on the best options for you.
If you intend on using professional Trustees such as a solicitor, there will likely be an annual fee for the admin work carried out over the course of the year, this is calculated on a case-by-case basis.