Investment advice for Trustees
A Personal Injury Trust allows for compensation to be held and managed to ensure that it is not taken into consideration for assessment of means-tested benefits or future residential care costs.
A Personal Injury Trust also helps to protect the person who has been injured (the Beneficiary) from their settlement being used in an unsuitable way, either due to pressure from other people or through their own behaviour.
Legal duties of Trustees
When a Personal Injury Trust is being created, Trustees will need to be appointed. The Trustees will take responsibility for managing the finances and/or assets (e.g. the compensation amount) of the Trust for the overall long-term benefit of the Beneficiary.
This includes the Trustees ensuring that the assets are invested appropriately, according to the investment objectives and risk profile for the Personal Injury Trust with the overall objective being to provide for the Beneficiary.
The Trustees must use their utmost diligence to best avoid any financial loss and may be liable to the Beneficiary for any breach of this duty. Therefore, as part of the Trustees’ role, it is essential that the proper duty of care is taken.
The Trustee Act 2000 (England & Wales) states that Trustees must:
- Pay particular attention to standard investment criteria, namely have regard to the suitability of the investment to the Trust and the need for diversification, to the extent it is appropriate for the circumstances;
- Ensure that they monitor investments regularly and vary them if appropriate; and
- Obtain and consider proper advice about how the power to invest should be exercised or the investments of the Trusts varied.
Investment advice for Trustees – How we can help
As a Trustee, deciding how and where to invest the money can be a challenge and one that should be handled by a professional Independent Financial Adviser.
At Nelsons, our team of expert Independent Financial Advisers in Derby, Leicester and Nottingham work with Trustees across the country to potentially provide a lifetime income for a Beneficiary, if required, from the Personal Injury Trust fund and with access to capital on an ad hoc basis.
We can provide bespoke advice in relation to the:
- Asset allocation;
- Approach to investment risk;
- Investment management; and
- Tax position.
Cash flow modelling for a Personal Injury Trust
A detailed cash flow modelling analysis of the Personal Injury Trust can be undertaken by our team with the purpose being to estimate how long the Beneficiary of the Trust will be able to meet their anticipated out-goings before the Trust assets are exhausted.
The cash flow modelling analysis will highlight to the Trustees the investment growth required to enable the Trust assets to meet the Beneficiary’s financial needs for the rest of their life.
Cash flow planning is a valuable tool to help the Trustees see the ‘bigger picture’ at the outset, and on an on-going basis when reviewing assets of the Personal Injury Trust with their financial adviser.
Our team of Independent Financial Advisers
We are one of the largest law firm providers of independent financial advice in the UK and are authorised and regulated by the Financial Conduct Authority. With over 30 years’ experience in providing expert financial advice, our team of advisers help clients to make the right decisions for their circumstances.
For more information in relation to the investment advice services we can provide to Trustees of a Personal Injury Trust fund, please call 0800 024 1976 or contact us via our online form.
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