Personal injury trusts

Personal injury trust

When you’ve suffered a personal injury, the last thing you want to have to deal with is your benefits being stopped because you have received a compensation payout. This is where personal injury trust can help.

What is a personal injury trust?

A personal injury trust is a trust that holds the funds that have been paid in the form of compensation awarded to someone who has experienced a personal injury.

If you have received compensation for a personal injury, you may no longer be eligible for certain elements of Universal Credit, which now encompasses means-tested benefits, including those for housing, children and unemployment.

This means that you need somewhere to hold your compensation so it does not affect your benefits. A personal injury trust is used for exactly this reason. Holding your compensation in a personal injury trust will ensure it is not taken into consideration when the authorities are deciding on your benefits.

Do I need a personal injury trust?

If you receive any Universal Credit benefits and are involved in a personal injury that you can claim compensation for, it will be worth looking into a personal injury trust.

Authorities will not differentiate between your savings and any finances you may have received as compensation after an accident.

If you have £6,000 in your account – between you and your partner – you will likely see a cut to your benefits. Meanwhile, if you have more than £16,000 to your name, you will likely not be entitled to any benefits.

You may be surprised by your need for a personal injury trust, but you may suffer life changing injuries as a result of an accident, causing you to then be unable to work. You may then find yourself reliant on benefits to support yourself and your family. In this case, you wouldn’t want the funds from any compensation you receive to affect what you are entitled to in state benefits.

What do I need to know about personal injury trusts?

A trust is not like an ordinary bank account, so making normal deposits isn’t advised. You should ensure that the only funds in your personal injury trust come from your compensation.

Trustees then manage and access the account. This will typically be yourself and another person you name – most often this is a spouse or partner, parent or child. But as long as the other trustee is over the age of 18, you can name whoever you want. Your solicitor can also act as a trustee.

All trustees must agree to the release of funds from the trust when they are required. After an agreement, you can access this trust whenever you want.

How do I set up a personal injury trust?

Your best option for setting up a personal injury trust and getting the right guidance with it is by getting in touch with specialist personal injury solicitors.

First4Lawyers can help put you in touch with the right solicitor for you. Get in touch by giving us a call, requesting a call back or starting your claim here.