Thursday 20 June 2013

Personal injury trusts – what’s the story?

Chris Lucas of Garden House Solicitors - Personal Injury Trusts Specialist
Article by
Chris Lucas
I have just settled a personal injury case for one of my clients who had an unfortunate accident whereby a barrel was thrown onto his leg causing a significant trauma injury with various other complications. The case settled for a five figure sum and was actually the highest award I have ever achieved for one of my own clients in my career as a trainee. Given the amount of compensation my client is due to receive, I have advised him to give careful consideration to setting up a personal injury trust.

What is a personal injury trust?
A personal injury trust is a legal arrangement whereby the compensation awarded from a personal injury claim is held and controlled by people chosen by the injured client, the ‘trustees’. The trustees’ responsibility is to look after the money and use it for the benefit of the injured client, the ‘beneficiary’.

Can’t I just pay my compensation into my bank account?
There are a number of reasons why we would advise any client receiving a large amount of compensation to set up a personal injury trust. The most common reason is that if you are in receipt of means tested benefits, the money you have will be taken into account. The threshold is that if you have over £6,000, your entitlement to benefits will be affected. In addition, if you currently receive or will need Community Care Support at some point in the future, having a large sum of money can lead to your support costs increasing significantly.

What if I just spend my compensation quickly?
Your entitlement to benefits could still be affected if you do not act in a way which is considered reasonable. Spending your compensation all at once on a shopping spree or using the money to pay off your mortgage are examples of where the Benefits Agency might conclude that you have attempted to defraud the system and you could be penalised as a result.

I don’t think I have anything to worry about
You might not receive benefits now and therefore think that none of this applies to you, however this is not necessarily the case. You could for example all of a sudden lose your job and require Income-based Jobseeker’s Allowance. Or you might suffer some ill health affecting your ability to work and therefore require Income-related Employment and Support Allowance. The truth is that anything could happen in the future and you can never be too prepared.

So what are the benefits of a personal trust?
A personal injury trust allows the injured client to enjoy their large award of compensation without having to worry about the money being taken into consideration for the purposes of means tested benefits. The personal injury trust also allows for a lot of flexibility and is generally straightforward to administer.

If you would like any information or assistance with regard to setting up a personal injury trust, please do not hesitate to telephone me on 01992 422 128 or contact me by email

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Tel: 01992 422 128

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.


  1. Great post Chris, there's some great info here on Personal Injury Trusts.

    I'll be tweeting this later!

  2. Nice Read!!! Personal injury trusts is very much important if you want to secure your future. Accidents are uncertain and it is important that if you are facing any accident you can make a claim for that. Must keep in mind that there has been a time limit in which you can make a claim. After passing the time, there is not any sense of claiming. For more information check out here-

  3. If you have been advised that a personal injury trust is a good idea, and you want to set up a trust, then the cost should not put you off. The cost should be a few hundred pounds rather that thousands, and there should be no ongoing cost and only limited administration for the trustees. The cost of not setting up a personal injury trust may be the loss of means tested State and local authority financial support for a long time to come.

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