Protecting Your Compensation with a Personal Injury Trust
Understanding How a Personal Injury Trust Protects Your Compensation
A personal injury trust is a legal arrangement that allows your compensation to be held separately from your personal assets. If you’ve received a payout following an accident at work, road traffic accident, medical negligence claim, or another type of personal injury case, a trust can ensure that your compensation is protected and not counted in means-tested benefits assessments.
This is especially important if you’re currently claiming benefits or may need to in the future. Without a trust, your settlement could be treated as part of your capital, affecting your entitlement to support such as Universal Credit, housing benefit, or council tax reduction.
Why Set Up a Personal Injury Trust?
Setting up a personal injury trust ensures your compensation is used for what it was intended — your care, rehabilitation, and future wellbeing. Even if you’re not claiming benefits now, your situation could change. You might leave work, retire, separate from a partner, or move into care. In each of these scenarios, your financial circumstances would be reassessed, and your compensation could put your eligibility for support at risk unless it’s protected in a trust.
A properly structured trust ensures the funds are ringfenced. This is particularly useful when facing long-term care costs, or if you’re managing a serious injury or permanent disability. At Stonehewer Moss, we regularly help clients with complex or high-value settlements ensure their compensation is safeguarded for the future.
What Types of Compensation Can a Personal Injury Trust Protect?
A personal injury trust can protect a wide range of compensation payments, including:
- Settlements from civil personal injury claims
- Criminal Injuries Compensation Authority (CICA) awards
- Motor Insurers’ Bureau (MIB) compensation
- Charitable payments or government compensation schemes
- Armed Forces Compensation Scheme (AFCS) payouts
- Compensation from professional negligence involving under-settled injury claims
If you’ve received compensation through any of these channels, a trust may be essential to protect your financial future.
How Does a Personal Injury Trust Work?
To create a personal injury trust, you’ll need to appoint at least two trustees. One of these can be yourself, and the others are usually trusted family members or friends. For larger settlements or complex needs, you might choose to include a professional trustee.
A dedicated bank account is opened in the name of the trust. Your compensation is paid into this account and managed according to a legal document called a trust deed. Although the trustees manage the funds, they must always act in your best interests and cannot use the money for themselves.
Will I Still Have Access to the Funds?
Yes — a personal injury trust is designed to give you ongoing access to your money. While the trustees oversee how it is used, they can release funds to you or pay expenses on your behalf. This includes things like travel costs, care fees, mobility equipment, home adaptations, or even holidays.
By using the funds through the trust, you reduce the risk of the money being treated as part of your personal capital — helping you retain your benefits and financial support.
When Should You Set Up a Personal Injury Trust?
Ideally, you should set up your personal injury trust within 52 weeks of receiving your first compensation payment, whether that’s an interim payment or a full settlement. Delaying can lead to complications or loss of benefits.
Our personal injury solicitors can help you set up a compliant trust quickly and efficiently, ensuring your rights are protected from the start.
Trusted Personal Injury Trust Solicitors in Cheshire
At Stonehewer Moss, we’re committed to supporting injured people throughout Cheshire and Northwich. Whether you’ve experienced a workplace injury, road traffic accident, clinical negligence, or serious trauma, we’ll guide you through every step — including setting up a personal injury trust where needed.
We offer a free 30-minute consultation, and most claims are handled on a No Win No Fee basis. If you’re unsure whether a trust is right for you, we’re here to advise.
Speak to Our Personal Injury Experts
To find out more about setting up a personal injury trust or to start your claim, call our friendly team today on 01606 872200 or 0800 434 6544. You can also start your claim online and we’ll be in touch. Our experienced solicitors are here to help you protect your future and secure the compensation you deserve.
It’s not legally required, but using an experienced solicitor is highly recommended. They’ll make sure the trust is properly structured, legally compliant, and tailored to protect both your compensation and your benefit entitlement.
