Bare trust for personal injury damages award

A Bare Trust for Personal Injury Damages Award is a legal document used to create a trust that holds compensation received by an individual for personal injury. The trust is established to manage the damages award, ensuring that the funds are used exclusively for the benefit of the injured party. This type of trust is "bare," meaning the trustees hold the assets on behalf of the beneficiary, who has absolute entitlement to the trust fund.

The document outlines the roles and responsibilities of the trustees, who manage the trust assets in accordance with the settlor’s instructions. It includes provisions on how the income and capital from the trust can be utilized, such as making payments directly to the beneficiary or for their benefit. It also specifies how the trust assets should be handled upon the death of the beneficiary, usually by transferring them to the beneficiary’s estate.

This document is commonly used in cases where the damages award is significant and needs careful management to protect the beneficiary’s financial interests. For example, it can safeguard funds from being spent unwisely, ensure eligibility for means-tested benefits, or help with long-term financial planning. It is especially useful for beneficiaries who may lack the capacity to manage large sums of money independently.

In addition, the document includes detailed administrative provisions, such as the trustees’ powers to invest, borrow, manage property, and insure trust assets. These provisions ensure that the trustees can effectively manage the trust in the best interests of the beneficiary.

By setting up a bare trust for personal injury damages, the injured party retains full ownership of the funds while benefiting from the professional oversight of the trustees. This arrangement offers financial security and peace of mind for both the beneficiary and their family.

How to use this document?

1. Gather Key Information
   Collect all essential details, including the date of injury, the date of the court order or settlement, the name of the defendant(s) responsible for the damages, and the initial fund amount to be placed in the trust. Ensure accuracy as these details will form the basis of the trust document.

2. Customize the Template
   Fill in the required information in the template, replacing placeholders with specific details. Specify the names of the Settlor, Trustees, and any appointers, along with their addresses. Ensure that the administrative provisions align with your intended purpose for the trust.

3. Review and Execute the Document
   Have the completed document reviewed by a legal professional to confirm compliance with relevant laws and the Settlor's intentions. Once approved, the document must be signed by all parties involved, including the Settlor and Trustees, and executed as a deed to make it legally binding.

4. Set Up and Manage the Trust
   Transfer the initial fund or damages award into the trust. The Trustees should maintain detailed records of trust assets, income, and expenditures. They must manage the trust in accordance with the terms specified in the deed, ensuring that the trust fund is used solely for the Settlor’s benefit.