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A Personal Injury Trust is a legally binding arrangement which holds the funds from a personal injury award for a beneficiary. It allows a beneficiary to retain their entitlement to means tested State benefits without having to take their personal injury compensation award into account.

The Trust ring-fences the money from outside influences and opportunists and is therefore particularly beneficial where there is a vulnerable beneficiary.

Once the Trust is set up it provides flexibility and ease of use so that the Trustees simply agree amongst themselves as to what items need to be paid for from the Trust Fund before arranging payment.

Where professional Trustees are involved the beneficiary will have the advantage of having access to other specialist advisors who have a proven track record in working with such Trusts and which will provide a beneficiary with the support needed throughout their lifetime.

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Personal injury Trust solicitors frequently asked questions

What is a personal injury trust?

A trust is a relationship that is recognisable and enforceable by the court. 

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Who should set up a personal injury trust?

Anyone who is in receipt of means-tested State benefits.

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What would happen to my capital if I did not set up a personal injury trust and received means-tested State benefits?

The first £6,000 of your capital will be disregarded.  

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At what stage should I set up a personal injury trust?

Any capital in excess of £16,000 will disentitle a beneficiary to means-tested State benefits.

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What happens if I decide to just spend my personal injury award rather than place it in a trust?

You should set up a personal injury trust within 52 weeks of receiving the first interim payment of your personal injury award.

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What is a Trustee?

If you have spent your award within the 52 week period or brought it below the £6,000 mentioned earlier then you do not necessarily need to set up a personal injury trust.

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How many Trustees should I have?

A Trustee is a person who you trust and they would be the person appointed to look after your personal injury award.

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Who can be a Trustee?

We are a specialist team who have been setting up and running personal injury trusts for compensation awards for years. As well as being qualified solicitors Boyes Turner are also fully accredited members of the Society of Tax and Estate Practitioners.

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Why use a Professional Trustee?

When acting as professional Trustees we always take advice from independent advisors.

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How can a Trust Fund be invested?

Usually, Trustees can sign the cheques and transfer money from the Trust account to the beneficiary.

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How can I access the Trust Fund?

Only the money from a personal injury award can be paid into the Trust bank account or a tax refund which is the result of the investment of funds.

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Can I pay other money into my Trust bank account?

Many of the personal injury trust that we prepare are known as ‘bare trusts’. This is one of the more straightforward types of trusts so that Trustees are given the award to hold for the injured beneficiary.

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How will my Trust be taxed?

The Trust Fund will form part of your estate and be distributed in accordance with the terms of your Will.

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What will happen when I die?

The beneficiary can call for funds as and when they are required but the Trustees still have a duty to ensure that the money is being paid for the correct purpose. These sorts of Trusts do not have to be registered with HMRC Inheritance Tax Office and the income and Capital Gains are treated as that of the beneficiary. This means that the beneficiary’s own personal Tax Return should be completed so as to include all of the Trust’s income and Capital Gains. The Trust arrangement is seen as ‘tax neutral’ so that it does not make any difference for tax reasons as to whether the monies are in the Trust or in the beneficiary’s own personal bank account. The Trust income and capital is therefore taxed at the beneficiary’s rate.

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Why would I need a Personal Injury Trust?

Your eligibility for certain assessed government benefits can be affected as a result of a legal claim for compensation or on receipt of an insurance policy payout for personal injury. These state benefits could include:

  • Income support
  • Jobseekers allowance
  • Employment support allowance
  • Housing benefit

A general rule is that if the total amount of personal injury compensation received exceeds £6,000 then your benefits will be affected. If the personal injury compensation amount is over £16,000 then you are at risk of losing your benefits entirely.

As your compensation is often to help cover lost earnings or to aid adaptation to your new circumstances and injuries, it is important that your ability to receive benefits is also protected. To help safeguard you and your future, it is possible to place your compensation money in a Personal Injury Trust.

Personal Injury Trusts keep your compensation safe, whilst allowing you to remain entitled to your means-tested state benefits.

How do Personal Injury Trusts work?

A Personal Injury Trust is an arrangement through which Trustees “hold” a personal injury award for you so that you retain your benefit entitlement. Trustees are chosen by you to look after your assets and act in your best interests. They are often a partner or a parent but can be a solicitor

Trustees hold your assets for you, and you can call for them whenever you wish. They are responsible for managing the money on your behalf by ensuring the money is invested and distributed according to the rules of the Trust.

There is no minimum number of Trustees but we recommend you choose at least two. We do not recommend that you are a Trustee of your own Trust. However you will have power to remove and appoint new Trustees and to end the Trust at any time you feel is necessary.

How can Boyes Turner help?

Our Personal Injury Trust specialists provide services including:

  • Advising on the formalities of setting up a Trust
  • Drafting all Trust documentation
  • Setting up a Trust bank account
  • Arranging for an independent financial advisor to liaise with you and your Trustees
  • Preparing the investment policy statement
  • Completing tax returns
  • Preparing annual Trust accounts

Boyes Turner is here to help, not only with the creation of the Trust but to advise and support you throughout the ongoing process.

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  • No upfront costs & no win, no fee
  • Expert rehabilitation help
  • Free & no obligation initial advice

Meet your specialist team

Our specialist Personal injury Trust solicitors team are considered leaders in the field and have a significant amount of expertise.
Ruth Meyer photo

Ruth Meyer

Partner

Alexander Wright headshot

Alexander Wright

Partner

Anne Pearson headshots

Anne Pearson

Senior Paralegal

Sue Clark photo

Sue Clark

Senior Associate – Solicitor

Lindsay Da Re

Lindsay Da Rè

Associate - Solicitor

Alex Edwards

Alex Edwards

Associate - Solicitor

Jessica Jarvis Headshot

Jessica Jarvis

Associate - Solicitor

Dani Pini headshot

Dani Pini

Solicitor

Ellie Adams profile picture

Ellie Adams

Senior Paralegal

Katarina Ahmed

Katarina Ahmed

Paralegal

Daisy Fox

Daisy Fox

Paralegal

Lauren Hall headshot

Lauren Hall

Paralegal

Maria Hobbs

Maria Hobbs

Paralegal

Sue headshot

Sue O'Connell-Davidson

Paralegal

Nadine Silas-Richards

Nadine Silas-Richards

Paralegal

Victoria Stewart

Victoria Stewart

Paralegal

Niki Tarrant headshot

Niki Tarrant

Senior Paralegal

Emma Wheeldon headshots

Emma Wheeldon

Senior Paralegal

Ewelina Wolanin headshot

Ewelina Wolanin

Paralegal

James Pantling-Skeet headshot

James Pantling-Skeet

Senior Associate – Chartered Legal Executive

Ruth Meyer photo
Alexander Wright headshot
Anne Pearson headshots
Sue Clark photo
Lindsay Da Re
Alex Edwards
Jessica Jarvis Headshot
Dani Pini headshot
Ellie Adams profile picture
Katarina Ahmed
Daisy Fox
Lauren Hall headshot
Maria Hobbs
Sue headshot
Nadine Silas-Richards
Victoria Stewart
Niki Tarrant headshot
Emma Wheeldon headshots
Ewelina Wolanin headshot
James Pantling-Skeet headshot

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Our medical negligence and personal injury teams have been nationally recognised for over 20 years because of their expertise, empathy and commitment to securing maximum compensation for our clients.

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