Do I need a Personal Injury Trust?

What is a Personal Injury Trust?

A Personal Injury Trust is used to hold and manage money you’ve received through personal injury compensation. The money held in the trust is managed by appointed Trustees who will handle the money on behalf of the Beneficiary (the person benefitting from the trust).

The Beneficiary will usually be a trustee themselves alongside a partner, unless they’re a child, in which case, their parents are likely to act as their Trustee. A professional can also be appointed. All Trustees must agree to the release of any money from the trust.

Any funds in a Personal Injury Trust won’t be factored into your entitlement to means-tested benefits, including:

• Council Tax benefit
• Child Tax Credit
• Employment and Support Allowance
• Housing Benefit
• Job Seekers Allowance
• Universal Credit
• Working Families Tax Credits

Benefits of a Personal Injury Trust

As well as protecting your means-tested benefits, there are many other advantages to setting up a Personal Injury Trust:

• It helps to ‘ring fence’ the funds you’ve received by keeping them separate from your other financial assets. That way, if you ever do need to claim means tested benefits in the future, your savings won’t be factored in.
• It protects your entitlement to Local Authority funding in the future should you need to move into a residential care home.
• As all transactions within the trust must be approved by the Trustees, this protects vulnerable Beneficiaries from financial abuse.
• If you’ve got knowledgeable Trustees, you can rely on them to act in your best interests and help you with making important decisions about your finances.