At Harris Fowler Solicitors, we understand that receiving compensation after a personal injury can provide much-needed financial relief and support during a difficult time.
However, many clients are unaware of the advantages of setting up a Personal Injury Trust to help safeguard that compensation for the future.
A Personal Injury Trust can play a crucial role in protecting your entitlement to benefits and ensuring your compensation is used in the most effective way.
What is a Personal Injury Trust?
A Personal Injury Trust is a legal arrangement that allows you to place your compensation award into a specially designated trust fund. This fund is managed by trustees (which can include yourself and someone you trust) for your benefit.
It applies to compensation received from a personal injury claim, including accidents at work, road traffic accidents, or medical negligence.
The primary reason for setting up a Personal Injury Trust is to protect your entitlement to means-tested benefits and local authority support. Without a trust, your compensation could be counted as part of your savings and potentially reduce or eliminate your eligibility for certain benefits.
Why Set Up a Personal Injury Trust?
There are several key benefits to establishing a Personal Injury Trust:
- Preserve Means-Tested Benefits
If you receive benefits such as Universal Credit, Housing Benefit, or Council Tax Reduction, receiving a lump sum of compensation directly into your personal account may take your capital above the allowable threshold (currently £16,000 for many benefits). A Personal Injury Trust ring-fences that money so it isn’t included in your means test. - Control and Flexibility
With a properly structured trust, you maintain access to the funds and can use them for your benefit at any time, with the agreement of your trustees. - Financial Safeguarding
A trust can also offer protection if you are vulnerable, lack capacity, or need help managing your finances in the future. - Peace of Mind
Knowing your compensation is protected and appropriately managed can relieve stress and provide security for your future needs.
When Should the Trust Be Set Up?
Ideally, the Personal Injury Trust should be established within 52 weeks of receiving your first compensation payment. During this time, the money is disregarded for benefits assessments, giving you time to set up the trust without financial penalty. However, we always advise acting sooner rather than later to avoid complications.
How Can Harris Fowler Help?
As specialists in personal injury law, we are also experienced in guiding clients through the process of setting up a Personal Injury Trust. We work closely with trusted professionals to ensure the trust is correctly drafted, compliant with all legal requirements, and tailored to your individual circumstances.
We’ll explain your options clearly, help you appoint suitable trustees, and ensure the structure works for you, whether your compensation is modest or substantial.
Final Thoughts
A Personal Injury Trust can be an essential step in safeguarding your financial future following an injury. If you have received, or are about to receive, a compensation award, we strongly recommend seeking legal advice about setting up a trust.
To discuss your options in confidence, please contact our team at Harris Fowler Solicitors. We’re here to ensure your compensation works for you, not against you.
