A personal injury trust is a type of trust that is set up to manage compensation awarded as a result of a personal injury. The trust is designed to protect the individual's assets from assessment for, means-tested benefits and contributions towards community care costs.

If you have been awarded compensation or received an insurance pay out as a result of a personal injury that you suffered, it can sometimes mean that you're no longer able to receive certain state benefits that are means tested, or your benefits are reduced as a result, which can have a significant negative impact on daily life.

You will have received the compensation or insurance money in order to help you adapt to new circumstances, or to cover lost income and expenses that have left you out of pocket due to the injury you suffered. However, this money can be considered to be 'savings' in regard to the benefits you receive, which can mean you'll no longer be eligible for them.

However, setting up a personal injury trust can help to protect the money you received as a result of the injury you suffered, without you losing access to the state benefits that you may need. This might include universal credit, or various other benefits like income support or jobseekers allowance and housing benefit.

If you are the parent or guardian of a child who has received personal injury compensation, the creation of this type of trust can ensure that this money is protected for the benefit of the child and their future needs.

A personal injury trust is a legal device to hold money received as a result of a personal injury safely and separately to personal finances. The personal injury trust fund is managed by trustees, which may include you or your spouse, or may be solicitors. The trustees ensure that the money is held on trust for when it's needed by the beneficiary, and all trustees must agree to release funds if money from the trust is required. There must be a minimum of two trustees, but many trusts have more.

As a personal injury compensation trust, or the trust that holds the insurance pay out, is totally separate from personal finances, it is not taken into account when means-testing for state benefits.

It's important to take expert legal advice when you are considering setting up a personal injury trust, to ensure that it is done in the ways that will best benefit the beneficiary, both now and in the future.

At Forbes Solictors, we're highly experienced in this area and can offer specialist support to help with every aspect of creating and managing a personal injury trust.

We can offer advice on protecting your assets efficiently, ensure that a personal injury trust is the right option for you by taking all the circumstances into account, help to prepare all of the documents and paperwork required, assist with appointing trustees and give ongoing support as required in the future.

Get in touch if you would like to discuss setting up a personal injury trust. Call us on 0800 689 3206.

The money held by the trust may be able to be used to purchase property, or contribute to the purchase of a property, for the beneficiary. However, this is complex and the way in which the money is used can have consequences in the future if things aren't managed and documented as they should be. For example, properties bought in whole or part with trust money will need to be registered in a certain way to protect the asset in the future. You need to take expert advice if you plan to use money held in the trust to purchase property.

Find out more by calling our team on 0800 689 3206

If you're looking for a trust to be set up to manage assets like property as an inheritance for loved ones, you will need to look at a different kind of trust, such as a family trust.