Do I need a professional trustee?

Setting up a Personal Injury Trust (PIT) is a sensible and beneficial way of managing compensation funds from a personal injury claim. However, a question we are commonly asked by those setting up a Trust is whether they should instruct a professional trustee instead of or in addition to a friend or family member as a trustee.

When a professional trustee makes sense

If there is significant compensation

Professional trustees have expert knowledge, including specialist knowledge on tax, trust administration, and legal obligations, as well as the regulatory compliance needed when managing complex trusts. It is therefore particularly worth considering a professional trustee if you anticipate receiving significant compensation.

To reduce the burden

Aside from expertise, appointing a professional trustee can help reduce the burden on family members and help ensure they maintain a relationship with the beneficiary without having to worry about having difficult conversations about the beneficiary’s finances. Professional trustees will act objectively, uninfluenced by family politics, to uphold the beneficiary’s wishes.

The beneficiary of the Trust can also be a trustee themselves. However, they often do not want to be a trustee or would like to be appointed alongside a professional trustee. This can be for a wide range of reasons, but it is often simply because they feel they would benefit from a combination of expertise with personal knowledge of their needs.

Whether the beneficiary is a trustee alongside the professional or not, the professional trustee has a duty to involve the beneficiary in the decision-making. It is important to remember that, in these circumstances, the beneficiary has the capacity to manage their own finances. Also, whilst the ‘buck’ stops with the professional trustee, it is for them to advise the beneficiary how the funds are being managed and actively involve them in the decision-making process.

To benefit from professional advice

Whilst a PIT is often set up post-settlement, it is not uncommon for the Trust, particularly one that would benefit from a professional trustee, to be set up pre-settlement. This is often the case when the settlement is anticipated to be significant and can take several years to settle, with interim payments being received in the meantime. The 52-week grace period starts from the first payment, and so, if you receive an interim payment early on in your claim, it may not settle until a few years later, meaning the 52-week grace period expires and your benefits are impacted. This is particularly common where a claim is being made on behalf of a minor.

Another benefit of setting up the PIT before settlement is that you will benefit from the advice of your professional trustee as the litigation is ongoing, and your trustees can support you and your litigation expert as your case progresses.

Our professional trustee expertise

Our Court of Protection team offers a professional trustee service across the UK from our offices in Bristol and the surrounding area, in Bedminster, Bishopston, Bristol city centre, Kingswood and Thornbury.

To speak to us about our trustee services, call our Court of Protection team on 0117 325 2929 or complete our online enquiry form.