The Benefits of Holding Your Compensation in a Personal Injury Trust
The first benefit of personal injury trust is for future care costs. The thing is that when you are still breathing, you will need assistance with medical care. You should also know that the cost of care is also increasing at an alarming rate. When you develop complications you will seek local authority assistance with settling your fees. But with personal injury trust, you will not have to worry about this as you will be able to benefit from the funds from your trust and also get the funding of the local authority. One the other hand, you will have to use the compensation fund towards the cost of your care when the compensation is held on your name.
Personal injury trust will also help in planning for inheritance tax. One thing that you should understand is that as the cost of houses is increasing, the burden of inheritance tax is also increasing. It is essential to note that when you put your compensation under personal injury trust, it will not be included in your estate. This means that it will help in lowering the inheritance tax. This is not what will happen when you put compensation under your name as it will be included in your estate making the inheritance tax to be higher.
Besides, you should also place your compensation on personal injury trust for means-tested benefits. You need to note that this will only benefit you when you are aiming at claiming any type of means-tested benefits. What happens when the compensation is held by you is that you stand a chance of losing your entitlement benefits. The good news is that when you place your compensation under personal injury trust, it will not apply in the calculation of your benefits. This will allow you to spend the trust fund for other vital things.
You should also hold your compensation on personal injury trust for protection during the divorce. It is essential to note that one thing that happens during divorce is that the couples divide the property. This means that you will have to bring all your financial resources together. One thing nobody would want is for your compensation to be included in the finances to be divided. This is where personal injury trust comes in as your compensation will not be included.
The last benefit of using personal injury trust is that it will help in safeguarding your compensation for the future. One thing that you cannot avoid is pressure from family members or friends to use the funds to benefit them. The good thing with personal injury trust is that your compensation will be protected by trustees to benefit only you.