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Book
Coldrick on Personal Injury Trusts
Fourth Edition
Published: 2008
Pages: 335
eBook: 9781787426948
This vital report is the only textbook of its kind for practitioners in this complex area of law. Since 2002 this essential resource has continued to fulfil its promise of:
Enabling compensated persons to understand and obtain the best deal from the means-tested benefits system through the use of personal injury trusts;
Enabling solicitors to unravel the mystique surrounding the foundation and administration of personal injury trusts and to equip them to fulfil their role better for it;
Enabling solicitors to develop compensation protection services to help protect their firms from negligence claims and to improve the bottom line; and
Enabling solicitors to do these things in as efficient and as practical a way as possible with the greatest amount of professional peace of mind.
The fourth edition has been fully updated to include:
The significant changes by the mental capacity act 2005 which came into force fully on 1st October 2007;
A revised and expanded property section with specific focus on purchasing property where there is a P I Trust in place or where the Court of Protection are involved;
2008 changes to the care rules and Employment and Support Allowance, which has replaced Incapacity Benefit for new claimants;
Plus, new and up-to-date precedents. It is vital that every lawyer doing personal injury compensation work should have a copy of this book on their shelves to enable them to give truly comprehensive advice as to the final process in achieving compensation.
Enabling compensated persons to understand and obtain the best deal from the means-tested benefits system through the use of personal injury trusts;
Enabling solicitors to unravel the mystique surrounding the foundation and administration of personal injury trusts and to equip them to fulfil their role better for it;
Enabling solicitors to develop compensation protection services to help protect their firms from negligence claims and to improve the bottom line; and
Enabling solicitors to do these things in as efficient and as practical a way as possible with the greatest amount of professional peace of mind.
The fourth edition has been fully updated to include:
The significant changes by the mental capacity act 2005 which came into force fully on 1st October 2007;
A revised and expanded property section with specific focus on purchasing property where there is a P I Trust in place or where the Court of Protection are involved;
2008 changes to the care rules and Employment and Support Allowance, which has replaced Incapacity Benefit for new claimants;
Plus, new and up-to-date precedents. It is vital that every lawyer doing personal injury compensation work should have a copy of this book on their shelves to enable them to give truly comprehensive advice as to the final process in achieving compensation.
Table of Contents
| Cover\r | Cover | |
|---|---|---|
| Title\r | i | |
| Copyright\r | ii | |
| Contents | iii | |
| Foreword | ix | |
| A lawyer’s tale | xi | |
| Introduction to the fourth edition | xiii | |
| The four pillars of this work | xv | |
| Acknowledgements | xvii | |
| Disclaimer | xix | |
| Copyright | xix | |
| Table of cases | xxi | |
| Table of statutes and legislation | xxiii | |
| Chapter 1: An overview of personal injury trusts | 1 | |
| Introduction | 1 | |
| Getting over the fear factor | 1 | |
| What exactly is a ‘personal injury trust’? | 2 | |
| Do all personal injury clients need advice on personal injury trusts? | 3 | |
| Does advice on personal injury trusts only need to be given to those already in receipt of means tested benefits? | 3 | |
| Do personal injury trusts have tax advantages? | 4 | |
| Do personal injury trusts help clients retain entitlement to means tested benefits? | 5 | |
| Timing: when is it ‘too late’ to found a personal injury trust? | 12 | |
| Independent financial advice and the Trustee Act 2000 (TA 2000) | 12 | |
| A summary of the financial obligations of trustees of personal injury trusts | 14 | |
| The Solicitors’ Accounts Rules 1998 and personal injury trusts | 17 | |
| Thinking long term | 17 | |
| Summary of Chapter 1 | 18 | |
| Chapter 2: Choice of personal injury trust | 21 | |
| Why is it important to consider different types of personal injury | 21 | |
| The implications of the 2006 Budget upon the choice of personal injury trust | 21 | |
| Underlying considerations behind the choice of a personal injury trust | 22 | |
| Types of personal injury trusts | 22 | |
| Original Section 89 IHTA trusts for the disabled | 28 | |
| Making a decision over the choice of trust | 29 | |
| Finance Act 2006: the implications for pre 22 March 2006 personal injury trusts and future personal injury trusts | 30 | |
| The extension of Section 89 IHTA trusts for disabled persons | 37 | |
| The capital gains tax principal private residence exemption, ordinary discretionary trusts and Section 89 and 89A trusts | 43 | |
| Summary of Chapter 2 | 44 | |
| Chapter 3: Getting technical – means-tested benefits | 45 | |
| Benefits implications of personal injury trusts | 45 | |
| Means-tested benefits | 45 | |
| Mainstream income-related means-tested benefits and awards for personal injury | 49 | |
| A word about tax credits | 54 | |
| Residents in long-term care and the receipt of personal injury awards | 55 | |
| Personal injury trusts and care provided at home | 58 | |
| Additional notes on personal injury trusts and means-tested benefits | 59 | |
| Pension credit | 60 | |
| Chapter 4: Choice of trustees | 67 | |
| Can a settlor be a trustee of his/her own personal injury trust? | 67 | |
| How many trustees should there be? | 67 | |
| Are friends and family suitable trustees? | 67 | |
| Are professional trustees appropriate? | 68 | |
| Can trustees be beneficiaries? | 68 | |
| Can a trustee live abroad? | 69 | |
| How old should a trustee be? | 69 | |
| Who should never be a trustee? | 70 | |
| When does trusteeship take effect? | 70 | |
| Summary of Chapter 4 | 70 | |
| Chapter 5: Personal injury trusts and investment | 71 | |
| Introduction | 71 | |
| Defining and meeting the investment challenge | 72 | |
| Modern Portfolio Theory and its implications for trust investment policy | 75 | |
| Building an asset class portfolio – the basics | 77 | |
| Selecting and working with a financial adviser | 84 | |
| Summary of Chapter 5 and conclusion | 86 | |
| Chapter 6: Periodical payments | 89 | |
| A brief history | 89 | |
| Why have few structured settlements been implemented in the past? | 90 | |
| The Courts Act 2003 | 91 | |
| Can periodical payments be assigned or charged? | 96 | |
| What about variable periodical payments orders? | 97 | |
| Are periodical payments treated any differently than a lump sum for benefits entitlement? | 98 | |
| The viability of periodical payments and indexation | 98 | |
| The indexation of periodical payments | 100 | |
| The indexation | 103 | |
| RPI | 103 | |
| The Annual Survey of Hours and Earnings (ASHE) 6115 | 107 | |
| Other elements | 109 | |
| The creation of a two-tiered system | 111 | |
| The advantages of periodical payments | 113 | |
| The disadvantages of periodical payments | 115 | |
| Other issues | 116 | |
| Conclusions | 117 | |
| Chapter 7: Personal injury trusts and the Court of Protection | 119 | |
| Introduction | 119 | |
| Jurisdiction | 119 | |
| The Court of Protection and personal injury trusts | 120 | |
| Why apply to found a personal injury trust for a patient? | 121 | |
| Should the deputy be retained? | 125 | |
| Worked example of an application for a personal injury bare trust | 127 | |
| Court of Protection Application form | 128 | |
| Guidance notes | 135 | |
| Court of Protection Annex A Supporting information for property and affairs applications | 141 | |
| Court of Protection Assessment of capacity | 159 | |
| Guidance notes | 169 | |
| Court of Protection Witness statement\r | 171 | |
| Chapter 8: Will-making in the context of personal injury bare trusts | 177 | |
| Executors | 177 | |
| The beneficiaries | 177 | |
| Indecisive testators | 178 | |
| ‘Letters of Wishes’ | 178 | |
| Property issues and succession | 178 | |
| Inheritance tax planning in the context of personal injury trusts | 178 | |
| Death of family members and benefits-related planning | 179 | |
| Death of carers | 179 | |
| Other potentially important matters | 180 | |
| Summary of Chapter 8 | 180 | |
| Chapter 9: Property transactions and personal injury trusts | 181 | |
| The natural link between personal injury trust work and property transactions | 181 | |
| What are the advantages of the trust framework for a purchase? | 181 | |
| Practical issues to consider on a purchase | 182 | |
| Legal issues to consider on a purchase prior to exchange of contracts | 182 | |
| Legal issues on a purchase post completion | 183 | |
| What are the relevant tax-related issues for personal injury trusts and property transactions? | 183 | |
| Worked examples of property transactions and personal injury trusts | 184 | |
| Chapter 10: Personal injury trusts – some problem areas | 189 | |
| Fatalities cases | 189 | |
| Professional negligence compensation | 190 | |
| Other types of compensation | 190 | |
| Past care awards | 191 | |
| Divorce | 192 | |
| Disagreement among the trustees | 193 | |
| Can the defendant reduce the award if a personal injury trust is contemplated? | 193 | |
| The implications for litigators | 197 | |
| The choice and use of powers comprised in a personal injury trust | 199 | |
| Chapter 11: General precedents | 203 | |
| Precedent covering letter and guide for clients | 203 | |
| Precedent Pro Forma Instructions | 215 | |
| Precedent Guidance for Beneficiaries and Trustees | 220 | |
| Precedent Guide on Compensation Protection Trusts for Benefit Paying Agencies Including the Local Authority | 228 | |
| Precedent Resolution to Distribute | 234 | |
| Chapter 12: Drafting personal injury trusts | 237 | |
| The fundamental responsibilities of the draftsman in using these personal injury trust precedents | 237 | |
| The style of the following personal injury trust precedents | 238 | |
| Who may legally draft a personal injury trust? | 238 | |
| Common factors contained within the personal injury trust precedents | 239 | |
| Uncommon factors contained within the personal injury trust precedents | 241 | |
| Precedent for a Personal Injury Discretionary Settlement: Notes | 244 | |
| Precedent for a Personal Injury Flexible Life Interest Settlement: Notes | 250 | |
| Precedent: Personal Injury Bare Trust: Notes | 257 | |
| Precedent for a Personal Injury Bare Trust: Mentally Capable Adult | 258 | |
| Precedent for a Personal Injury Bare Trust: Court Order for a Minor under rule 21.11 of the Civil Procedure Rules 1998 | 265 | |
| Precedent for a Personal Injury Bare Trust: Court of Protection for a Mentally Incapable Beneficiary | 270 | |
| Precedent for a Personal Injury Life Interest Settlement: Court of Protection for a Mentally Incapable Beneficiary | 276 | |
| Precedents for Personal Injury Section 89 IHTA 1984 Trusts for the Disabled: Notes | 281 | |
| Precedent for a Personal Injury Section 89 IHTA 1984 Trust for the Disabled: Wide Form | 283 | |
| Precedent for a Personal Injury Section 89 IHTA 1984 Trust for the Disabled: Narrow Form for a Mentally Incapable Person | 289 | |
| Examples of the Type of Further Provisions the Draftsman May Also Choose to Incorporate | 294 | |
| Appendix 1: The Standard Provisions of the Society of Trust and Estate Practitioners (1st Edition) | 297 | |
| Appendix 2: Paying family carers: income tax and national insurance issues | 303 | |
| Appendix 3: A practitioner’s guide to Court of Protection property procedures | 313 | |
| Index | 325 |
Anyone who buys this edition has no excuse for failing to understand what to do and how to protect his/her clients. It is a valuable addition to the armoury of any personal injury lawyer who is seeking to maximise the damages for his/her clients. It should be one of the growing number of essential books, necessary to have on one's bookshelf.
Robin de Wilde, QC
David Coldrick
https://www.linkedin.com/in/david-coldrick-971624b/
Lynne Bradey
https://www.linkedin.com/in/lynne-bradey-bbb83b20/