Personal injury trusts

If you suffer a personal injury you may become entitled to various means-tested State benefits. Alternatively, you may already be in receipt of a benefit and should you then make a successful claim for compensation, you might find that you suffer a reduction in some if not all of them (or you may lose them altogether) when the payment is made to you. 

Benefits legislation however allows you to put your personal injury award ‘in trust’ and whilst it's held in that way your entitlement to benefits is unaffected.

The term ‘in trust’ can extend to various arrangements but what's often used is a ‘bare trust’. This is an arrangement where other people, the Trustees, hold your money for you. It remains your money in the sense that you can tell the Trustee what you want them to do with it and this can be a very useful way of allowing you to keep your benefits whilst also allowing you to draw on you personal injury award as and when you need to. Personal injury trusts can also help those that are inexperienced in handling large sums of money or those who wish to isolate the funds from friends or relatives.

For larger sums, a Professional Trustee may be required or the compensation award may have to be managed under the Court of Protection – the specialist Court for issues relating to people who lack the mental capacity to make their own decisions.