Personal Injury Trusts

If your personal injury claim is successful, you may have received a significant sum of money to compensate for past and future financial losses suffered as a result of the injury. Your regular living costs will still need to be met, including providing maintenance costs for dependant relatives. It is often the case that you may be entitled to state benefits and funding for care services. Personal Injury Trusts make this possible, regardless of the compensation that you are awarded. 

What is a Personal Injury Trust?

A personal injury trust separates the compensation that you were awarded as a result of your injury from your other assets, and therefore allows for you to be assessed for means tested benefits without taking the compensation into account. Two – four trustees are required to manage the trust, and they must make decisions together about the management of the funds. 

Do I need a Personal Injury Trust?

You are not required to have a personal injury trust in place if you receive compensation for an injury. However, there are many reasons why a personal injury trust is beneficial. 

• If you were eligible for means tested state benefits and services before you received the compensation, the funds are disregarded if placed in a personal injury trust to allow you to continue to receive these benefits in the future. 

• Similarly, your financial circumstances may change in the future, meaning that you will need to claim for benefits that you did need before you suffered the injury; the money kept in your personal injury trust will not affect your ability to claim for benefits.  

• Appointing appropriate trustees to manage the funds in your personal injury trust can provide you with protection against the inappropriate use of the funds, particularly if you are considered to be a vulnerable individual. 

How do I set up a personal injury trust?

If you wish to set up a personal injury trust, it is recommended that you seek legal advice beforehand to ensure the correct type of trust is used, the trustees appointed are appropriate and the relevant documentation is prepared. If there is a large sum of money held in the trust, it is often appropriate to appoint a professional trustee.  It is also recommended that the trust is set up before you receive your compensation, however this does not mean that one cannot be set up afterwards. 

Speak to Hannah Goodman

Hannah is a Trainee Solicitor at Wollens and can advise you. Contact Hannah via email hannah.goodman@wollens.co.uk or call 01803 225159.

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You can also complete an online enquiry form. One of the Wollens team will contact you as soon as they are available.