A Special Needs Trust is a trust that contains money received as a consequence of personal injury.
A Special Needs Trust is a trust created for disabled individuals, which is intended to supplement, but not replace, any means-tested benefits to which the disabled individual may be entitled.Under the current rules – if you have over £6,000 capital you are at risk of having some or all of your benefits reduced. If you have over £16,000 then you are at risk of losing them all entirely. If your compensation is paid directly to you, rather than put into a trust, then you will be classed as having this money as your disposable capital.
If you are expecting to receive more than £6,000 in compensation for your personal injury, then you should consider setting up a Special Needs Trust. Even if you are expecting to receive less than £10,000 in compensation for your personal injury, you should still seek advise on whether to establish a Special Needs Trust as it still may prove cost effective.
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There are other considerations. If you think you may need to go into residential care at some point in the future, then establishing a Special Needs Trust will protect your compensation from being taken away by the Local Authority in order to pay for your care fees.