Personal Injury Trusts

If you are in receipt of means tested benefits or care home fee funding (or may become a candidate for such funding in the future) and are awarded compensation resulting from a personal injury or accident then a personal injury trust is an opportunity for you to use your compensation without the payment affecting entitlement to your welfare benefits. Such trusts are vital in many cases and if the compensation is not paid into a personal injury trust then you may lose your benefits.

If you are not presently in receipt of benefits or care home fee funding but consider that you may need to make a claim in the future then it is worthwhile protecting your personal injury compensation in a personal injury trust. This is because if you save the compensation you may later find that you have to use the funds to pay for your own care. Furthermore, if you try to rapidly deplete the compensation by spending it quickly you could fall foul of strict Local Authority rules that prevent you from doing this.

It is crucial that the personal injury trust is set up as early as possible, preferably around the time of the first payment of compensation, usually called an interim payment.

There are different types of personal injury trust but the most common form is a bare trust. A bare trust means that the personal injury monies held within it are yours which you can demand at any time. The compensation is held in the name of a trustee who has the responsibility of looking after the compensation for you. Although not a legal requirement a professional such as a solicitor can act as your trustee.

To establish a personal injury trust, then the person who has received the compensation must have capacity. If it is deemed that they do not have capacity, then in order to establish a personal injury trust, authority must be given by the Court of Protection.

The Court of Protection may decide that the funds should be held under the control of a deputyship order, or alternatively, held in a personal injury trust. The most common scenario where the funds are authorised by the Court of Protection to be held in a personal injury trusts, is where the injured person has already established Powers of Attorney in relation to their property and financial affairs.

If a trust is the preferred receptacle for the funds, the Court of Protection will normally insist on at least one professional trustee where the damages are substantial. Sintons acts as a professional trustee through Sintons Trust Corporation Limited and are often appointed to that role.

Please do not hesitate to contact us should you require any assistance.