If you’ve received or are due to receive compensation from a personal injury claim, whether that’s from a road traffic accident, accident at work, or medical negligence, you may be wondering what to do next. One option worth considering is setting up a Personal Injury Trust.
What is a Personal Injury Trust?
A Personal Injury Trust is a special type of bank account where you can keep money you’ve received as compensation for an injury. Instead of putting the money into your normal bank account, you put it into this trust. The trust is managed by people you choose, called trustees who could be family members, friends or professionals. They help look after the money and make sure it’s used for your benefit.
Why might a Personal Injury Trust be beneficial?
The key advantage of setting up a Personal Injury Trust is to protect any benefits you are receiving. The trust stops your compensation from being counted as part of your personal assets when assessing eligibility for means-tested benefits.
As an example, you may receive a lump sum for your injury. If you simply deposit the money into your regular bank account, it could push your savings above the threshold for benefits like Universal Credit. By placing the money into a trust, it’s ring-fenced and not considered as part of your accessible capital, meaning you can continue to receive those benefits while still having access to your compensation.
But the advantages go beyond just preserving benefits. A Personal Injury Trust also provides a layer of protection and oversight. Trustees can help manage the funds, ensuring they’re used appropriately. If as a result of your injuries you require things like medical care, rehabilitation, or adapting your home, a Personal Injury trust can keep your compensation safe and separate. This can be especially helpful if you’re vulnerable or recovering from a serious injury.
Setting up a trust is relatively straightforward, but timing is crucial. Ideally, it should be done before you receive the settlement money or within 52 weeks of receiving your first payment to avoid affecting your benefits. You’ll need legal advice to ensure the trust is properly drafted and tailored to your circumstances.
In summary, a Personal Injury Trust is a smart way to safeguard your compensation, maintain financial support, and ensure your money is used wisely. If you’ve received, or expect to receive a personal injury settlement, you should speak to a solicitor experienced in this area. It’s a small step that can make a big difference in your financial future.
For straightforward advice on personal injury claims, please contact our experts at Farleys on 0845 287 0939, get in touch by email, or through our online chat below.
