In the event of a successful Personal Injury claim.
If you’ve had a successful personal injury claim, putting it in a Trust can make sure the money is used to compensate you – rather than giving the Government a reason to stop helping you. In most cases, benefits start to be reduced if a person currently has capital of £6,000 or above. Once a person has over £16,000 nearly all benefits are typically lost. A personal Injury Trust is a legal document which allows any compensation you have received to be disregarded when you are assessed for means tested benefits whilst ensuring you still have access to the funds. The benefits agency generally gives you 52 weeks from payment to create the trust.
If you have a blended family or are worried about care fees.
These are typically called Property Protection Trusts and are usually created when a couple have children to a previous relationship or have concerns over what would happen to their property if their partner were to remarry after their death. These trusts can balance the interests of children and surviving partners by allowing a partner to have use of the property whilst they are alive, or until they remarry or cohabit. Once this interest has been fulfilled the property is split between your nominated beneficiaries such as your own children. Another result of this trust would mean that the Government cannot claim the first to die’s half of the house towards the survivor’s care fees. Should the survivor remarry, only their share can be passed to a future spouse.
Put simply, it’s a good way to protect your share of a property and make sure that your biggest asset can only transfer into the hands of those who you specify.