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Personal Injury Trusts 

Personal Injury Trusts 

When you receive compensation for an accident, medical negligence or any form of personal injury, your entitlement to state benefits or funded care could be severely affected. That’s why a Personal Injury Trust is the only legal way to prepare for the unexpected and protect your future income. 

What is a Personal Injury Trust?  

A Personal Injury Trust is created by a legal document which allows you (the injured person) to receive any amount of compensation without it affecting benefits, care home fees or predatory family wishing to stake a claim. 

Why set up a Personal Injury Trust? 

Claiming for compensation following medical negligence or any form of personal injury is a very lengthy process. It requires a lot of complicated administration and can take years to conclude, which means that you’ll need to rely on the benefits system. 
 
However, the money you receive as compensation may reduce your entitlement to state benefits, which necessitates a supplementary source of income. That’s why having a Personal Injury Trust in place is such a wise decision and a great way to plan ahead. 
 
It may be that you struggle to manage money or are unable to get out of the house easily and so would like chosen trustees to help you with this. 
 

How long do I have to set up a Personal Injury Trust?  

A key factor to bear in mind is that a Personal Injury Trust can’t be backdated more than 52 weeks from the date you received the compensation. This means that even if you’re not claiming any benefits now but do in the future, having a Trust in place will be hugely beneficial. 
 
For instance, the corona virus pandemic resulted in hundreds of thousands of people needing to use the benefits system for the first time in their lives. If any of these people had previously received compensation for medical negligence or any form of personal injury, their benefits claims were delayed, reduced or deemed invalid. 

What are the benefits of a Personal Injury Trust?  

The main reason so many of our clients choose to create a Personal Injury Trust is that it provides complete peace of mind: 
 
As the injured party, you can receive any amount of compensation without it affecting your benefits. 
This allows you to continue your current lifestyle without having to worry about a significant drop in income. 
It also takes into account care home fees if applicable. 
Another advantage is that if you need someone to help you manage your money during this time, a Trustee of your choosing will have the legal right to assist you. 

Examples of compensation claims eligible for a Personal Injury Trust 

Injuries caused in any way by a third party where you are not at fault 
Medical negligence for incorrect treatment or diagnosis 
Injuries at work 
Compensation received from the Criminal Injuries Compensation Authority (CICA) for injuries caused by an assault or abuse 
Compensation from the Motor Insurers’ Bureau for injuries caused by an uninsured or untraced motorist 
Compensation for an accident that happened abroad 
Compensation ordered by a Criminal Court in respect of an injury you suffered 
An Armed Forces Compensation Scheme award 
Payments from other government compensation schemes 
Charitable or public donations following an injury 
Payments from insurance policies, such as personal accident insurance or travel insurance 
Some Employment Tribunal awards 
Payments from a Permanent Health Insurance policy, which is made because you cannot work due to a physical or psychological condition 
Payments from a professional negligence claim paid to compensate for a poorly handled personal injury claim 
Breach of human rights 
Breach of civil liberties 
Road traffic accidents 

Can I spend the compensation or give the money away so as not to lose my benefits?  

Yes. There are no restrictions how you spend your compensation. There is no reason to 'hide or give your money away.' As long as the funds come from your Trust, it's perfectly legitimate to spend the money as you wish and it to not affect your benefits.  

Do I need a Trust if I don’t currently receive benefits?  

Many of our clients set up a Personal Injury Trust when not receiving benefits, which protects their income should their circumstances change. A good example of this was during the COVID-19 pandemic, which forced many thousands of people to claim Universal Credit for the first time. Any compensation not in Trust was taken into account and the benefits claims were rejected. 

Personal care  

If you require care in the future, either at home or in a care home, you will be expected to fund it out of your compensation settlement. A Personal Injury Trust prevents this from happening. 

Appointing a Trustee  

For a Personal Injury Trust to work, there must be at least two trustees. You can be one of the trustees and you can choose a second person to help you manage your compensation alongside you. Alternatively, you can appoint two trustees to manage it entirely on your behalf. The trustees can be people you know and trust or you can appoint professional trustees. 

Find out more about Personal Injury Trusts  

We appreciate that all of the above can be a lot to digest, so our specialists are here to answer any questions and put your mind at ease. To find out more, please call our office on 01482 380740 or complete the online form below 
 
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