Personal Injury Trusts

When a Claimant receives a considerable award, there is a possibility that they could lose their entitlement to means-tested benefits. However if the award is placed into a Personal Injury Trust (PIT), it is managed by appointed trustees meaning it does not form part of the Claimant's personal finances. Instead, it is considered a 'separate entity' for the benefit of the Claimant, meaning they retain their entitlement to means-tested benefits.

When claimants receive means-tested benefits, an award of compensation can mean that they no longer qualify for those benefits.

Spending the award quickly or giving part or all of it away is not an alternative solution as the benefits agency may still be entitled to remove or reduce the benefits.

If an award of compensation is likely to affect any means-tested benefits, a Personal Injury Trust is advisable.

Trustees manage the money on the claimant's behalf, ensuring that it’s invested if appropriate and used for their benefit. They’re required to keep records of all transactions where the Trust fund is used.

We’ll provide all the advice required to create the Trust. We’ll draft the Trust Deed, advise on who is suitable to act as a Trustee, and help them open a trustee bank account.

Trustees can either be trusted people, such as family members or close friends, or a professional such as a lawyer.

We always advise that a Trust should be considered once there's an awareness of any interim payments being made on the claim.

There’s a 52 week period where all payments are disregarded for benefits purposes. This period begins on receipt of the first interim payment made on the claim.

It’s therefore vitally important to consider a Trust as soon as there's an awareness of any interim offer being made.

The Trustees will manage the money on behalf of the claimant and make payments when requested. The claimant can also be named as one of the Trustees and be involved in the management of the Trust fund.

The Trustees have to agree to requests for funds from the Trust. However, care should be taken to ensure that any payments don’t affect any means-tested benefits.

It’s likely that the claimant will be the sole beneficiary of the Trust. Therefore, if they're 18 and have capacity, they can write to the Trustees confirming they wish for the Trust to be closed and all remaining monies paid to them.


As this may affect the claimant's benefits entitlement, advice should be taken before you take this course of action.

In the event of the claimant's death, any money left within the Trust will form part of their estate. If they have a will, it will be paid in accordance with the terms of the will. If they don’t, their estate will be distributed according to the rules of intestacy.