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Personal Injury Trusts

When in the process of making a claim for compensation in respect of personal injury or medical negligence, it may be necessary to consider a Compensation Protection Trust. Compensation Protection Trusts (also known as Personal Injury Trusts) help protect awards of compensation so that any means-tested benefits can continue to be claimed.

Why would a Personal Injury Trust need setting up?

When claimants receive means-tested benefits, an award of compensation can mean that they no longer qualify for those benefits.

Spending the award quickly or giving part or all of it away is not an alternative solution as the benefits agency may still be entitled to remove or reduce the benefits.

If an award of compensation is likely to affect any means-tested benefits, a Personal Injury Trust is advisable.

What happens to the money when it’s in the Trust?

Trustees manage the money on the claimant's behalf, ensuring that it’s invested if appropriate and used for their benefit. They’re required to keep records of all transactions where the Trust fund is used.

How is a Personal Injury Trust set up?

We’ll provide all the advice required to create the Trust. We’ll draft the Trust Deed, advise on who is suitable to act as a Trustee, and help them open a trustee bank account.

Trustees can either be trusted people, such as family members or close friends, or a professional such as a lawyer.

When should a Trust be set up?

We always advise that a Trust should be considered once there's an awareness of any interim payments being made on the claim.

There’s a 52 week period where all payments are disregarded for benefits purposes. This period begins on receipt of the first interim payment made on the claim.

It’s therefore vitally important to consider a Trust as soon as there's an awareness of any interim offer being made.

How easily can the money be accessed?

The Trustees will manage the money on behalf of the claimant and make payments when requested. The claimant can also be named as one of the Trustees and be involved in the management of the Trust fund.

The Trustees have to agree to requests for funds from the Trust. However, care should be taken to ensure that any payments don’t affect any means-tested benefits.

What if the claimant changes their mind about the Trust?

It’s likely that the claimant will be the sole beneficiary of the Trust. Therefore, if they're 18 and have capacity, they can write to the Trustees confirming they wish for the Trust to be closed and all remaining monies paid to them.

As this may affect the claimant's benefits entitlement, advice should be taken before you take this course of action

What happens if the claimant passes away?

In the event of the claimant's death, any money left within the Trust will form part of their estate. If they have a will, it will be paid in accordance with the terms of the will. If they don’t, their estate will be distributed according to the rules of intestacy.

How can Adroit help?

Call a member of our team of experts and we’ll provide you with all the information you need.

Adroit’s independent financial planning experts offer a tailored service to suit all your needs. Not only can they ensure that any compensation award together with any entitlement to means-tested benefits are protected, but can also offer expert financial and investment advice to increase the real value of the award to provide long-term financial security.

If you’d like more information about the services we can offer you or your clients, please contact us on 0330 995 6838 or email us at