Personal Injury Trusts



Our expert solicitors can help set up a personal injury trust to protect your compensation and provide for your future. At Forbes Solicitors, we understand that receiving compensation for a personal injury claim can bring new challenges. It can affect the individual's eligibility for certain means-tested benefits, and the compensation awarded may need to be managed for a long time to cover ongoing care costs. A personal injury trust can provide a solution to these issues and we provide bespoke advice and support to make sure that the trust meets your individual needs and circumstances.

What is a Personal Injury Trust?

A personal injury trust is a type of trust that is set up to manage compensation awarded as a result of a personal injury. The trust is designed to protect the individual's assets from assessment for, means-tested benefits and contributions towards community care costs.

If you have been awarded compensation or received an insurance pay out as a result of a personal injury that you suffered, it can sometimes mean that you're no longer able to receive certain state benefits that are means tested, or your benefits are reduced as a result, which can have a significant negative impact on daily life.

You will have received the compensation or insurance money in order to help you adapt to new circumstances, or to cover lost income and expenses that have left you out of pocket due to the injury you suffered. However, this money can be considered to be 'savings' in regard to the benefits you receive, which can mean you'll no longer be eligible for them.

However, setting up a personal injury trust can help to protect the money you received as a result of the injury you suffered, without you losing access to the state benefits that you may need. This might include universal credit, or various other benefits like income support or jobseekers allowance and housing benefit.

If you are the parent or guardian of a child who has received personal injury compensation, the creation of this type of trust can ensure that this money is protected for the benefit of the child and their future needs.

What is a personal Injury Trust?

A personal injury trust is a legal device to hold money received as a result of a personal injury safely and separately to personal finances. The personal injury trust fund is managed by trustees, which may include you or your spouse, or may be solicitors. The trustees ensure that the money is held on trust for when it's needed by the beneficiary, and all trustees must agree to release funds if money from the trust is required. There must be a minimum of two trustees, but many trusts have more.

As a personal injury compensation trust, or the trust that holds the insurance pay out, is totally separate from personal finances, it is not taken into account when means-testing for state benefits.

What are the main Personal Injury Trust benefits?

The main benefits for a personal injury trust set up for an adult is that it can help the beneficiary maintain access to state benefits and still be able to use the compensation or insurance money they received to help them now and in the future.

For a child, who is not yet of the age when they can be responsible for the sum of money that was awarded to them, the trust will help to ensure that the money is spent on the right things for the individual, or protected entirely until they are of an age when they can make decisions about it themselves. If the child is not expected to ever have the capacity to make their own decisions e.g. if the injury they sustained has affected their mental capacity, the trust may stay in place for the lifetime of the beneficiary.

How to set up a Personal Injury Trust

It's important to take expert legal advice when you are considering setting up a personal injury trust, to ensure that it is done in the ways that will best benefit the beneficiary, both now and in the future.

At Forbes Solictors, we're highly experienced in this area and can offer specialist support to help with every aspect of creating and managing a personal injury trust.

We can offer advice on protecting your assets efficiently, ensure that a personal injury trust is the right option for you by taking all the circumstances into account, help to prepare all of the documents and paperwork required, assist with appointing trustees and give ongoing support as required in the future.

Get in touch if you would like to discuss setting up a personal injury trust. Call us on 0800 689 3206.

Can a Personal Injury Trust own property?

The money held by the trust may be able to be used to purchase property, or contribute to the purchase of a property, for the beneficiary. However, this is complex and the way in which the money is used can have consequences in the future if things aren't managed and documented as they should be. For example, properties bought in whole or part with trust money will need to be registered in a certain way to protect the asset in the future. You need to take expert advice if you plan to use money held in the trust to purchase property. Find out more by calling our team on 0800 689 3206

If you're looking for a trust to be set up to manage assets like property as an inheritance for loved ones, you will need to look at a different kind of trust, such as a family trust.

Personal injury trusts and divorce

If a marriage breaks down and the couple decide to divorce, all of the finances of both parties are considered when the assets are divided in the final settlement. However, if there is a personal injury trust in place which clearly shows that the money held is for the beneficiary (one of the married couple) in the aftermath of the injury they suffered, it is much easier to argue that this should not be considered a joint asset that needs to be divided.

If the couple are both trustees for a personal injury trust held on behalf of a child, they can both continue to perform their role as trustees after the divorce if this arrangement works. However, it might be that they wish to appoint additional trustees to assist with future decisions.

It's recommended that anyone considering divorce takes legal advice, and this is essential if there is a personal injury trust involved, to help ensure the continued protection and good stewardship of the trust. Find out more about this by calling 0800 689 3206.

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