This article explores the interplay between vulnerable person trusts and personal injury trusts, two legal structures that can work in tandem to protect and support individuals who have suffered a serious injury.
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Vulnerable Person Trusts
As discussed previously, vulnerable person trusts are established under the Mental Capacity Act 2005 to manage the financial affairs of individuals who lack the mental capacity to make their own decisions. This can arise from a variety of conditions, including brain injuries sustained in accidents.
Key Features of Vulnerable Person Trusts:
- Court-Approved: These trusts require court approval, ensuring the best interests of the individual are protected.
- Focus on Welfare: The primary objective is to provide for the individual’s essential needs, such as accommodation, healthcare, and support services.
- Management by Trustees: Court-appointed trustees manage the trust assets, ensuring their responsible use.
Personal Injury Trusts
Personal injury trusts are established to manage the compensation awarded to an individual who has suffered a personal injury. These injuries can range from minor injuries to catastrophic events like spinal cord injuries or traumatic brain injuries.
Key Features of Personal Injury Trusts:
- Protecting Compensation: The primary objective is to protect the long-term financial security of the injured individual.
- Flexibility: These trusts offer flexibility in how the compensation is used, allowing for the funding of long-term care, rehabilitation, and other necessary support.
- Tax Advantages: In some cases, personal injury trusts can offer tax advantages, such as reducing the amount of income tax payable on the compensation.
How They Work Together
In cases where a person suffers a catastrophic injury that leaves them with significant long-term care needs and diminished mental capacity, a combination of vulnerable person trusts and personal injury trusts can be highly beneficial.
Here’s how they can work together:
- Initial Assessment: Following a serious injury, a comprehensive assessment will be conducted to determine the individual’s physical and cognitive abilities. This will help determine if the individual lacks the mental capacity to manage their own finances.
- Establishing a Personal Injury Trust: If the individual is successful in their personal injury claim, a personal injury trust will be established to manage the compensation received. This trust will be designed to provide for the individual’s long-term care needs, including:
– Medical expenses: This can include ongoing medical treatment, rehabilitation, and the cost of assistive technologies.
– Care costs: This can include the cost of professional care, such as home care, nursing care, and therapy.
– Living expenses: This can include the cost of housing, food, and transportation.
– Future care needs: The trust will be designed to provide for the individual’s future care needs, ensuring that they have the necessary financial resources throughout their lifetime.
- Considering a Vulnerable Person Trust: If the individual lacks the mental capacity to manage their own finances, a vulnerable person trust can be established alongside the personal injury trust.
– Court Approval: The court will appoint suitable trustees to manage the vulnerable person trust. These trustees will have a fiduciary duty to act in the best interests of the individual.
– Integration: The vulnerable person trust can be used to manage the funds held within the personal injury trust, ensuring that the individual’s needs are met and that the compensation is used appropriately.
– Protection of Assets: The vulnerable person trust can help protect the individual’s assets from potential risks, such as financial exploitation or mismanagement.
Benefits of Combined Trusts
- Comprehensive Support: Combining these trusts provides a comprehensive framework for managing the financial and care needs of individuals who have suffered catastrophic injuries.
- Long-Term Security: The personal injury trust ensures that the individual has the financial resources they need for the rest of their lives.
- Protection of Vulnerable Individuals: The vulnerable person trust safeguards the individual’s interests and ensures that their funds are used appropriately.
- Peace of Mind: Knowing that their loved one’s financial and care needs are being met can provide significant peace of mind to family members.
Important Considerations
- Legal Advice: It is crucial to seek professional legal advice from experienced solicitors specialising in both personal injury and mental capacity law.
- Tailored Approach: The specific structure and operation of these trusts will vary depending on the individual’s circumstances and needs.
- Regular Reviews: Regular reviews of the trusts will be necessary to ensure that they continue to meet the individual’s changing needs.
Conclusion
Combining vulnerable person trusts and personal injury trusts can provide a valuable framework for supporting individuals who have suffered catastrophic injuries and require long-term care. These trusts work together to protect the individual’s financial security, ensure their well-being, and provide peace of mind to their families.
How we can help
We have a proven track-record of helping clients create Trusts. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Wills and Probate Solicitors
It is important for you to be well informed about the issues and possible implications of creating a Trust. However, expert legal support is crucial in terms of ensuring your wishes are met as you would want them to be.
To speak to our Wills and Probate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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