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Personal Trust - Bare Trust

Bare Trust

How can I increase the income and keep capital from Means Assessment?

Client Circumstances

  • Miss Price has received £400,000 compensation for a road accident and has been sectioned under Mental Health Act
  • Capital sitting in Special Reserve account with Court of Protection (CoP) paying 0.5%
  • Her father has been made Deputy by the CoP
  • Miss Price was being cared for and fully funded by Local Authority
  • Deputy requires £10,000 pa for Miss Price

Recommended Solutions

  • Set up a Personal Injury (PI) Bare Trust for receipt of award, through a Solicitor
  • Invest Trust capital in an Investment Bond wrapper
  • Asset allocation to meet Trustee risk profile
  • Diversify over a spread of four broad asset classes (UK Equity, Overseas Equity, Commercial Property and Fixed Interest)
  • Review and rebalance on regular annual basis
  • Set Up annual withdrawals of £10,000pa from the Bond
  • Ensure Miss Price has made a Will

Benefits from advice given

  • By investing through a PI Trust, this will protect capital from means test
  • Provide potential for a better return than currently receiving
  • Less administration for Deputy
  • The Will sets out who is to benefit from Miss Price’s estate

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Future Servicing

We will look to carry out a regular review of your circumstances, objectives, needs and portfolio performance to ensure all arrangements continue to be suitable and advise of any changes that may be appropriate.

This example is for illustrative purposes only, based on current legislation and tax allowances. Tax rules and regulations are subject to change.

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