A personal injury trust is no different from a regular trust, except that it holds personal injury compensation. It can be set up by the person receiving the compensation (called the beneficiary), or by someone else on their behalf if they’re a minor or they’ve lost mental capacity.
Trustees are appointed to look after the trust and, if appropriate, make decisions on behalf of the beneficiary.
Ideally the trust will be set up before the first compensation payment is made, so that the money can go straight into it.
If your personal injury compensation goes directly to you, instead of into a trust, it will be included in a financial assessment for any means-tested benefits. This means you could lose benefits you should be entitled to.
Depending on the nature of your (or your loved one’s) injury, you may be eligible for a number of benefits and support services, which you should be able to take advantage of.
By setting up a personal injury trust to hold any compensation, you can ensure you’re still able to claim and benefits you’re entitled to.
We have extensive experience helping clients access benefits and our Public Law team can help you challenge decisions from your Local Authority or NHS care provider about the funding you can receive.
The trustees of a personal injury trust can be anyone you choose. You can appoint yourself as a trustee, even if you’re also the beneficiary of the trust.
Trustees will be responsible for managing the money in the account according to the terms on which the trust has been established. This could include:
- Running the bank account
- Making investments
- Buying or selling a property
- Arranging care costs
Choosing reliable and responsible trustees is very important, especially if the beneficiary has suffered any sort of brain injury and no longer has mental capacity to make their own decisions.
We’ll be able to advise further on choosing the right trustees and how to protect the trust from mismanagement. Irwin Mitchell is also able to act as a trustee if you’d like.
It’s best to set up a PIT before you’ve received the first pay out of compensation. At the latest, it’s advisable to set it up within 52 weeks of this payment, as your means-tested benefits could be put at risk if you don’t set it up within this time period.
We’re experienced in personal injury trusts and can help you with both the setting up and running of the trust. Our tax and trust experts can ensure it’s tax-efficient and advise on any issues around compliance.
We can also advise on benefits you’re entitled to and help you challenge any adverse decisions from the Department of Work and Pensions or your care provider.
Our wills and probate team will be able to help you restructure your Will to make sure the trust is taken into account and doesn’t attract unnecessary tax for your estate.
If a loved one has lost capacity after a personal injury, we can also review any wills that had named them as a beneficiary. We’ll make sure any money they inherit is structured in the best way. This will ensure they won’t spend outside their means or fall prey to someone trying to take advantage of them in the future.
The cost for setting up a personal injury trust starts at £750 plus VAT. The cost will be tailored to each trust, however, depending on your specific needs.
Our Personal Injury Trust department is the largest in the UK. We can give you expert help and advice on creating and managing a trust, or setting one up on behalf of someone else.
We have an incredibly strong multi-disciplinary practice, meaning we can draw on the expertise of our tax, trusts, and probate specialists in-house.
From financial planning and investments, to advice on care plans and benefits, we have all the expertise you need under one roof.
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