Court of Protection
Personal Injury Trusts
If you've received a personal injury settlement, a Personal Injury Trust can protect your compensation, preserve your benefits entitlement, and safeguard your financial future.
What is a Personal Injury Trust?
A Personal Injury Trust is a legal arrangement where funds from a personal injury settlement — or from personal accident insurance, charitable gifts, or other sources — are held and managed separately from your own assets by people you choose, known as Trustees.
Keeping your compensation in a Trust means it is treated differently from your general savings for many purposes, which can bring significant practical benefits.
Why set up a Personal Injury Trust?
01
Protect your benefits entitlement
Compensation held in a Trust is generally disregarded when assessing means-tested benefits — including Universal Credit, free prescriptions, and free school meals. Without a Trust, a large settlement could reduce or remove these entitlements.
02
Shield funds from care costs
Whether you need care now or in the future, a Trust can help protect your compensation from being counted towards care fee assessments — preserving the funds for your benefit and that of your loved ones.
03
Protection in the event of divorce
Compensation held in Trust is ring-fenced from your general assets. If you divorce, this can strengthen the case for excluding those funds from the financial settlement.
04
Protection from financial pressure
Your Trustees act as a safeguard if you face pressure — from family, friends, or others — to use your funds inappropriately. Their role is to protect you and your compensation.
05
Security for the future
If you are unable to manage your own finances in the future, your Trustees will be in place to look after your compensation and ensure it continues to meet your needs.
How Rothley Law can help
Not all Personal Injury Trusts are the same. The right structure depends on your specific circumstances, and tailored advice is essential to make sure your Trust does what you need it to.
- Setting up your Trust. We advise on the most appropriate type of Trust for your situation and handle the full set-up process.
- Trusts for children and vulnerable adults. We advise on Personal Injury Trusts where the recipient lacks mental capacity or is a child, including applications to the Litigation Court for Trust approval as an alternative to funds being paid into court.
- Professional Trustee service. Our experienced team can act as your Trustee directly, providing ongoing management, advice, and support to ensure your funds are used appropriately and in your long-term interests.
Acting quickly matters. There are time limits on when a Personal Injury Trust can be set up to protect your benefits entitlement. If you’ve recently received a settlement, it’s important to seek advice as soon as possible.
Received a personal injury settlement and unsure what to do next? We'll help you understand whether a Personal Injury Trust is right for you.
Frequently Asked Questions
What is a Personal Injury Trust?
A Personal Injury Trust is a legal arrangement where compensation received following a personal injury is held and managed separately from the recipient’s own assets by appointed Trustees. This protects the funds and can preserve the recipient’s entitlement to means-tested benefits.
Do I need a Personal Injury Trust?
If you have received a personal injury settlement and are claiming, or may in future need to claim, means-tested benefits, a Personal Injury Trust is likely to be beneficial. Without one, your compensation may be counted as capital when assessing your entitlement, potentially reducing or removing your benefits.
How soon do I need to set up a Personal Injury Trust?
There are time limits that apply. If you deposit your settlement into a personal bank account and leave it there, you may lose the ability to protect your benefits entitlement. You should seek legal advice as soon as possible after receiving your settlement — ideally before the funds are deposited anywhere.
Who are the Trustees in a Personal Injury Trust?
Trustees are people you appoint to hold and manage the trust funds. They can be family members, friends, or professionals such as solicitors. You can also appoint a professional Trustee service, where an experienced team manages the funds on your behalf and provides ongoing advice.
Can a Personal Injury Trust protect my compensation if I divorce?
Holding your compensation in a Personal Injury Trust can strengthen the argument that those funds should be excluded from the matrimonial pot in divorce proceedings. However, this is not guaranteed, and the court will consider all the circumstances. Legal advice specific to your situation is essential.
Can a Personal Injury Trust be set up for a child?
Yes. Where a child receives a personal injury settlement, a trust can be set up with court approval — through an application to the Litigation Court — as an alternative to the funds being paid into court. This gives greater flexibility in how the funds are managed for the child’s benefit.
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