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PI Trusts and acting for clients on means tested benefits

Funds held in a PI trust are disregarded capital for the purposes of means tested benefits. Therefore it is very important to advise clients on setting up a PI trust if the client is claiming means tested benefits or may ever claim benefits or require local authority funded care in the future.

A PI Trust may also be useful for other reasons such as:

  • To provide a formal structure so that there is a clear distinction between the parents’ funds and the child’ damages or
  •  to protect a client who is vulnerable to financial exploitation or
  •  to protect a client who may suffer periods of mental incapacity in the future
  •  to assist a client who will struggle to cope with a large sum of money
  •  to ring fence the damages award from a future divorce.

If your client is a child and the damages award is substantial, the court will often only approve the settlement if one of the trustees is a professional.

Click here for more information about PI trusts.

Click here for more information about sending damages to clients who are on benefits.