What is a personal injury (PI) trust?
A PI trust enables a person who has received compensation from a successful personal injury claim to ensure their compensation is not taken into account for their means-tested benefits. A PI trust also ensures that your compensation is not considered when you are assessed to see if you have to pay for your own current or future care fees.
Who can set up a PI trust?
Anyone who has mental capacity and has received a payment for a personal injury can set up a PI trust. If you do not have capacity then your attorneys (appointed by a Lasting Power of Attorney) or deputies (appointed by a deputyship order) can set one up on your behalf with the authority of the Court of Protection.
Do I need a PI trust if I am not currently on benefits?
We recommend setting up a PI trust regardless of your current position, as there is always a possibility that this may change in the future.
Can I put other money into my PI trust?
No, the trust fund can only consist of compensation from your personal injury claim.
When can I take money out of my PI trust?
You will have access to your compensation as soon as it is available in the trust fund. A trust bank account will need to be set up in the name of the trustees. To withdraw any money from the fund, your trustees must sign the withdrawal documentation.
Who should I choose as my trustee(s)?
You should choose trustees who are over 18, reliable, trustworthy and good with money. A trustee is required to sign the withdrawal documentation when you request funds and so will have input on how the money is spent. NB: the bank will run checks on the trustees when setting up a trust account and the application will be rejected if the trustees fail the checks, which include money laundering and bankruptcy checks.
How many trustees do I need?
You must appoint at least one person (other than yourself) as a trustee.
When should a PI trust be set up?
There is a 52-week grace period from when the initial payment is received by you during which your compensation cannot be included in financial assessments for means-tested benefits or contributions to care fees. By putting your compensation into a PI trust during this time, you can ensure that any compensation you receive will not be counted in a financial assessment by the DWP or local authority for benefits or care home fees. If you decide not to set up a PI trust and instead spend the money or give it away during this period, then it could result in your benefits being stopped or reduced, or you having to pay your care fees. You are required to declare your compensation to the DWP if you are on benefits.
How large should an award for compensation be before I consider setting up a PI trust?
If you receive an award of more than £6,000, or if you receive a smaller award but you already have savings, then it can affect your benefit entitlement or your eligibility to have your care fees paid for.