What is a Personal Injury Trust?

Safeguarding Your Settlement for a Secure Future

A personal injury (PI) trust is a legal arrangement designed to provide essential support for individuals who have received compensation through a personal injury claim. While a trust deed is not mandatory for all compensation recipients, understanding its basics and recognising its purpose and advantages can significantly benefit specific claimants. This trust structure empowers individuals to manage their compensation funds strategically, ensuring the long-term security and welfare of those who have endured personal injury hardships. 

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How Do Personal Injury Trusts Work?

A personal injury trust is created by a claimant when they sign what is called a ‘trust deed document’. This document states who the claimant is permitting to look after their compensation funds on their behalf. These people will be referred to as ‘trustees’ in the document, and can be selected by the claimant. The trust deed will also explain how the money is to be spent, invested, or otherwise looked after for the claimant’s benefit.

Why Consider a Personal Injury Trust?

Most commonly, PI trusts are useful for those who are unable to, do not wish to, or are not comfortable with managing large sums of money they may have received as compensation. This might include elderly people, young people or those who are vulnerable – but of course, anyone can set up a personal injury trust if they wish to.

Once a personal injury trust is set up and your funds are in the hands of your trustees, decisions are then made in terms of where the best and safest opportunities are to store the funds. For example, your trustees may decide to invest, keep funds secure in a bank, or use them for other purposes. It’s important to note that one of the main purposes of the PI trust is to separate your compensation funds from your own personal money. This means that it is not best practice to regularly withdraw from your trust, and the money should instead be used for investments or larger, one-off purchases.

Here’s a breakdown of why a personal injury trust can be a great tool to help you manage your compensation income following an accident.

Protecting Your Compensation

A PI trust safeguards your compensation from being considered as part of your financial assets. This separation is crucial to shield your funds from potential creditors, ensuring they are available to meet your unique needs.

Preserving Means-Tested Benefits

If you rely on means-tested benefits such as housing or disability allowances, placing your compensation in a trust prevents it from impacting your eligibility. This means you can continue to access vital benefits that contribute to your financial stability.

Providing for Future Needs

Personal injuries can have long-term consequences. A PI trust allows you to plan for your future needs, such as ongoing medical treatment, rehabilitation, or adapting your living environment to accommodate your condition.

Common Types of Public Injury Claims

Personal injuries occur as a result of a number of reasons. Slips, trips and falls on uneven roads or pavements constitute one of the most common accidents, along with slips and trips on wet floors in shopping centres or shops. Common accidents also include:

  • Hot beverage spills in cafes and restaurants
  • Accidents on escalators or in lifts
  • Accidents due to faulty gym equipment
  • Injuries due to broken glass or other dangerous objects at parks or beaches

 

If you have suffered any such accident, even if you do not know who is responsible, then you should contact our expert personal injury solicitors who will advise you on whether you can make a claim.

Over the years, OH Parsons has helped thousands of clients secure compensation for accidents in public places. Fall injury compensation is an area in which we have had unparalleled success, and we have also worked across hundreds of public injury claims for sports injuries, as well as claims against the council. Whatever your accident, we will be able to support you in understanding your rights and whether you are entitled to compensation.

At OH Parsons, our experienced solicitors are well-versed in the applicable statute of limitations and will ensure that your claim is filed within the required timeframe. It is important not to delay seeking legal advice, as exceeding the statute of limitations may result in the loss of your ability to pursue a personal injury claim. 

Making a Public Injury Claim With OH Parsons Solicitors: The Process

Public injuries can be sustained for any number of reasons, and it is not always easy to succeed in showing that somebody else is legally to blame. At OH Parsons, we’re proud to offer our clients the services of the most experienced and professional public injury solicitors. You can rest assured that our legal team has the knowledge and experience required to build the strongest possible case for every claim.

We are also committed to providing clear and constructive legal counsel at every stage of the claim. We offer a free consultation at the very start of the process, and throughout, we do everything in our power to inform our clients about their rights.

Discover how you could better understand your claim and receive your deserved compensation for your public injury. You could be entitled to thousands of pounds in compensation, and we will help you win it.

  • A leading UK law firm for over 75 years
  • Tens of millions of pounds in compensation secured for serious injury and catastrophic injury claims
  • No win, no fee solicitors
  • Wealth of knowledge across different services
  • Always working for you, the individual
  • Protection from financial risk

How to Set Up a Personal Injury Trust

Establishing a PI trust involves several important steps to ensure the effective management and protection of your compensation. Here’s a breakdown of the key considerations:

  • Choosing Trustees: Selecting trustees is a crucial decision. Trustees are responsible for managing the trust’s assets and making distributions as needed. They should be individuals or professionals you trust to act in your best interests. Common choices include family members, close friends, or legal and financial experts. See more about this in the following sections on this page.
  • Legal Requirements and Documentation: To create a personal injury trust, you’ll need to draft a trust deed, which is a legally binding document outlining the trust’s terms and conditions. This document must comply with all relevant legal requirements and clearly specify the trust’s purpose, beneficiaries, and trustees’ powers and responsibilities. Seeking legal advice during this stage is highly advisable to ensure legal compliance.

 

Funding the Trust: Transfer the compensation funds you’ve received into the trust. This step may involve opening a dedicated bank account in the trust’s name, where all the compensation money will be held. It’s essential to follow the legal requirements for this transfer to maintain the trust’s integrity.

Managing a Personal Injury Trust

Once your personal injury trust is established, effective management is essential to ensure its continued success in protecting your compensation funds.

  • Trustee Responsibilities: Trustees play a vital role in managing the trust. Their duties include overseeing trust assets, making distributions in line with the trust’s terms, and keeping accurate records of financial transactions. They must act in the best interests of the trust’s beneficiaries and adhere to the trust deed’s provisions.
  • Investment Strategies: Deciding how to invest the trust’s funds is a critical consideration. Trustees should develop an investment strategy that aligns with the trust’s objectives and the risk tolerance of the beneficiary. This may involve consulting with financial experts to create a diversified investment portfolio that aims to preserve and potentially grow the trust’s assets over time.


Trust Administration: Proper administration involves maintaining meticulous records of all financial transactions, including income, expenses, and distributions. Trustees should also file tax returns on behalf of the trust, ensuring compliance with tax regulations. Regular reviews of the trust’s financial health and performance are essential to make informed decisions regarding investments and distributions.

Choosing Your Personal Injury Trustees

Before you can have a PI trust, you will be obliged to choose two or three trustees to look after the compensation you put into the trust. Trustees will also make decisions about payments from your trust.

In most cases, the claimants’ family members will fill this role. However, please note that it is best practice to avoid choosing those with a history of financial difficulty or those who may be overseas and therefore difficult to contact. You will also be advised to choose at least one or two trustees who are unlikely to die before you do. Understandably, this is not always possible.

What is the role of your trustees?

In short, your trustees are appointed to manage your trust. While payments will be subject to your consent, trustees will be encouraged to take proper investment advice and initiate discussions about opportunities for investments and other payments. They should always have your best interests at heart, and will be responsible for authorising all transactions within the trust, providing protection for you against inappropriate use of your funds.

As the trust owner, you do have the power to replace trustees if you wish. You are also entitled to close your trust if necessary, although this may trigger a significant loss of benefits.

What is the role of your trustees?

It’s important to always remember that the money in your trust belongs to you. The purpose of putting it into a PI trust is simply to keep it secure. With that said, you are entitled to use it for whatever you wish, but it is in your best interest to be mindful of what else could be impacted – for example, any benefits you are receiving.

Your normal expenses of daily living are supposed to be met by means-tested benefits. That includes things such as gas, water, electricity, food, mortgage interest, council tax, and most rent payments for any residential care. In the majority of cases, these should continue to be met by your benefits, which should help you budget properly. However, if there is a shortfall, these bills can be met by the trust (e.g. if you get an unexpectedly large heating bill).

Other costs that are not typically met by benefits include your phone bill, TV costs and the cost of extra care. These are examples of costs that should be met from your trust. Your personal injury trust can also pay for a place to live, a new car, petrol, a holiday and much more. When it comes down to it, what you use your compensation money for is up to you. Any money you do not need can be reinvested by your trustees for more long-term benefit.

For additional support in making important financial decisions with regard to your compensation, don’t hesitate to contact our expert personal injury solicitors. We’re here to provide any support you need throughout the challenging claims process.

Choose Our No Win, No Fee Claims

At OH Parsons, we always operate with a ‘no win, no fee’ guarantee: that means for our clients, there is no stress or worry about how the case will be funded. If, for any reason, your claim is unsuccessful, you’ll incur no charges as we take care of the costs. However, in the event of a successful claim, we’ll be able to recover the bulk of the costs from the compensator. From there, we can help you to set up a personal injury trust if required.

Making Your Public Injury Claim: Start With a Free Initial Consultation

3 Types of Personal Injury Trusts

Personal injury trusts come in various forms, each designed to cater to different circumstances and requirements. Here are the most common types:

A Bare Trust, also known as a Simple Trust, provides straightforward management of your compensation funds. You have complete control over the trust’s assets and can access them whenever needed. This type of trust is suitable when there are no means-tested benefits to protect.

Discretionary trusts are more flexible and offer greater asset protection. Trustees have the discretion to distribute funds as they see fit among the beneficiaries, ensuring that your compensation is utilised to meet your unique needs. This flexibility can be valuable, especially if your situation is complex, or if there are multiple beneficiaries.

Specifically designed to protect the interests of disabled individuals, these trusts provide a balance between asset protection and accessibility. They are especially helpful in preserving eligibility for means-tested benefits while allowing you to access the funds for disability-related expenses.

Each type of trust has its advantages and considerations. Deciding which one is right for you depends on your personal circumstances, financial goals, and the level of control you wish to maintain over your compensation funds. It’s advisable to consult with legal and financial professionals experienced in PI trusts to make an informed decision.

Lengtsi Curran

5/5

Chris Lewis of OH Parsons has been nothing but Professional, Courteous, Knowledgeable and PATIENT. Navigating me throughout these 4 1/2 years with prompts and good advise to a final successful conclusion.
My sincere gratitude and thanks to all involved. Would highly recommend.

Client Success Stories

We’re proud of the positive outcomes we have achieved for our clients, and their feedback speaks to our commitment to securing the maximum compensation for their injuries. 

We have successfully represented numerous clients in their claims for injuries compensation, particularly those involving serious injuries such as whiplash and spinal cord injuries. Read some of our client success stories to see how we have made a difference in the lives of those we have represented.

Man Awarded £508,000 Compensation For Injury At Work

5/5

The judge found that the claimant’s work had made a material contribution to his injury and that if it wasn’t for the injury the claimant would have continued to do this job until the age of 67 and was awarded over £508,000. 

£4.15m Settlement For Man Blinded At Work

5/5

This case settled at JSM for £4.15m, net of any deduction for alleged contributory negligence. Whilst not formally sub-divided, the award is broadly commensurate with care and assistance of over £2m, general damages of £335k, loss of earnings of £450k, accommodation of £350k, travel/transport expenses of over £200k, case management of £350k and equipment of £200k, plus lesser heads of loss. 

Airport Worker Awarded £150,000 Compensation for Personal Injury

5/5

We succeeded in obtaining a gross settlement of £150,000 for our client to compensate him for his pain and suffering, as well as his past and future financial losses. 

 

Frequently Asked Questions about Personal Injury Trusts

Having a personal injury trust is a way to ensure the money you receive as compensation is used at the right time and for the right reasons. It also allows you to protect your funds from becoming a financial hindrance – for example, you can stop your sudden influx of funds from disabling your benefit entitlements. Below we explore some of the key PI trust benefits.

  • Protection from means-tested benefits

If you receive compensation, even an interim payment, it will in most cases have an impact on your means-tested benefits. You will have an initial 12-month ‘period of grace’, but the payment you have received will be included in means testing after this date, and sometimes sooner. This period of grace is based upon complex legal provisions, and our advice is that you should not rely upon it.

Even if you do not get means-tested benefits right now, you might want to protect your compensation from the growing cost of long-term care. This is a significant concern for many people, and something we have lots of experience with here at OH Parsons.

  • Protection from entitlements and future claims

It’s important to note that your compensation may cost you more than you think if you do not put a PI trust in place. It has the potential to cut your present entitlements, as well as your ability to claim other forms of compensation in the future. Not having entitlement to means-tested benefits can also stop you from being able to obtain other valuable services, such as free prescriptions and school dinners for children.

  • Protection of your best interests

Having trustees to support you in making important financial decisions can be essential for people over or under a certain age, or those without the mental capacity to make a decision. As the claimant, you can benefit from the experience of your trustees and rest in the knowledge that your funds will be appropriately managed, while keeping them separate from your personal funds.

The need for a Personal Injury (PI) trust depends on your individual circumstances. If you’ve received compensation for a personal injury claim and you wish to protect those funds, especially if they are substantial, a PI trust can be highly beneficial. It helps safeguard your compensation from various risks and ensures it’s used to meet your long-term needs.

Yes, you can change trustees of a PI trust if needed. Circumstances can evolve, and you might find it necessary to replace or add trustees. It’s advisable to consult with an experienced solicitor to ensure that any changes to the trustees are made correctly and in compliance with the trust’s terms and legal requirements. 

In the event of your death, the PI trust can continue to exist. The trust deed will outline the specific provisions for this scenario. Typically, the trust assets can be distributed to your chosen beneficiaries or used for specific purposes, depending on the terms you’ve set in the trust deed. 

There can be limitations on trust funds, depending on the type of trust you’ve established and the terms outlined in the trust deed. For instance, in a discretionary trust, the trustees have the discretion to decide how and when to distribute the funds, which can create some flexibility but also certain limitations on direct control. In contrast, a bare trust provides the beneficiary with more direct control over the funds, but there may still be restrictions or conditions set in the trust deed. It’s crucial to consult with a legal expert who can explain the limitations specific to your trust.

A PI trust can play a crucial role in preserving your means-tested benefits. Compensation funds held within a properly structured PI trust are often disregarded when calculating your eligibility for such benefits. This allows you to retain your essential financial support while still benefiting from your compensation. However, it’s essential to set up the trust correctly to ensure it complies with the rules governing means-tested benefits.

The tax implications of a PI trust can vary based on factors such as the type of trust and the nature of the funds. Generally, compensation received for personal injuries is not subject to income tax. However, it’s essential to consider other taxes, such as inheritance tax, depending on the overall value of the trust and the specific circumstances. 

Legal counsel is invaluable when setting up and managing a PI trust. Experienced solicitors can guide you through the complexities of trust law, help you choose the most suitable type of trust for your needs, ensure compliance with legal requirements, and provide ongoing support for trust administration. They can also offer advice on how to protect your compensation and maximise its benefits, taking into account your individual circumstances and goals.

Accessing the funds in a personal injury trust typically involves making a formal request to the trustees, who have the authority to distribute the funds according to the terms outlined in the trust deed. This process can vary depending on the type of trust and its specific provisions, and it’s crucial to follow the established procedures and document the purpose for which you are requesting the funds.

Meet our Personal Injury Solicitors

Our personal injury solicitors have decades of combined experience helping clients win cases regarding serious accidents and public injuries. We can support your case, no matter where you are located in the UK.

About OH Parsons

OH Parsons is your trusted partner in personal injury claims, with years of industry experience advocating for clients. Our dedicated team of solicitors provides a personalised service, ensuring you receive the compensation you deserve. We work on a “No Win, No Fee” basis, prioritising your needs and guiding you through every step of the process.

Contact OH Parsons

For expert guidance in personal injury claims, contact OH Parsons today. Our experienced team is ready to provide you with the legal support you need to secure the compensation you deserve. Reach out to us via phone or email to schedule a consultation and discuss your case.

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