Personal injury trusts
Briefing Note: Personal Injury Trusts
March 2011
Author:
Grace Serwanga
About personal injury trusts
Personal injury trusts (also referred to as a
“special needs trusts”) are set up to ensure that the injured
party of a personal injury claim can continue to
receive means-tested benefits after receiving
a compensation award. This is not a loophole in the law
but specifically provided for in the Income Support (General)
Regulations 1987.
Advantages of a personal injury trust
Personal injury trusts have many other
advantages, primarily the protection of the fund
from people who may wish to exploit the vulnerability of the
recipient. The administration of a large sum of money can be
left to people with more experience, who are under an obligation to
act in the best interest of the beneficiary/ies. Another
advantage is "ring fencing" (or the award from the impact
of a divorce), as illustrated in the article below.
Trusts are effective vehicles which
ensure assets are used according to the purpose of the
settlor. They can be set up during your lifetime or in a
Will, but they are not often used due to fear of the
other factors that have to be considered in setting up of a
Trust, such as tax implications. Despite this, if
provided proper advice is received, trusts can be an invaluable
tool.
Personal Injury Trusts in the press
Article from Daily Mail:
Disabled crash victim fights to save his home as ex-wife wins most
of his £500,000 damages
Hodge Jones & Allen solicitor
Grace Serwanga comments on this article:
"This case is a contemporary example of a
situation where setting up a correctly-drafted personal injury
trust could have “ring fenced” the compensation award made to a
victim. This would have saved the injured party much of the
distress and costs that will now be incurred appealing this
decision."
Contact Hodge Jones & Allen
If you wish to speak to a personal injury trust
solicitor, contact Grace
Serwanga at Hodge Jones & Allen.