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Mental Capacity & Deputyship

Personal Injury Trust

Christine Dyson
Christine Dyson
Patrick Allen
Patrick Allen
Senior Partner
Sarah Charnley
Chantae Francis
Chantae Francis
Mohan Dhadli
Mohan Dhadli
Nicholas McKeowen
Nicholas McKeown

Our industry-leading lawyers specialise in fighting for compensation for people who’ve been injured as a result of accidents and hospital errors. The formal term for this action is a Personal Injury claim.

We can help further by setting up a trust for the compensation you receive from your claim.

Our specialist solicitors are experts in this area of law and regularly act as both professional deputies and trustees for a wide range of clients.

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A trust is a formal legal relationship where assets are put under the control of at least two persons (the trustees) for the benefit of another (the Beneficiary).

A personal injury trust (sometimes referred to as a compensation protection trust) is a trust set up using funds received as compensation for a personal injury (PI) claim. Personal injury includes accidental injuries, criminal injuries, clinical negligence and industrial disease related injuries. The injury can be physical or mental. PI trusts can be set up irrespective of the size of the payment made or where the injury occurred.


A PI trust can’t be set up where the injuries were fatal. The relatives of an injured person can claim compensation for bereavement and loss of financial support, but the compensation can’t be placed in a PI trust if they haven’t sustained any direct injury themselves.

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When is a personal injury trust useful?

Personal injury trusts and acting for clients on means tested benefits

Funds held in a PI trust are classed as disregarded capital, meaning they’re not taken into account when applying for means tested benefits. This means that it’s very important to seek specialist legal advice on setting up a PI trust if you’re claiming means tested benefits, may claim benefits in the future, 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’s a clear distinction between the parents’ funds and the child’s damages 
  • 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.

In cases where the 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.

“Christine Dyson is a fantastic to have as any part of the team. She is pragmatic and strong. Her decisions are always in the client’s best interests and she holds firm despite the behaviours of the difficult clients that we share.” – Legal 500, 2024

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How do you set up a personal injury trust?

To set up the trust you’ll need a minimum of two people to act as your trustees. The trustees must be over the age of 18 years, of sound mind, of good character and have no current or past problems with money. If you’re unable to secure another person to act as a trustee or wish to have a professional trustee, we can help. Our solicitors have decades of experience of acting as trustees and would be happy to be appointed trustees.

You’ll then need to contact us so that we can take the necessary details from you and draft a Trust Deed, which will need to be signed by you and your chosen trustees. 


After the Trust Deed has been signed, the trustees will need to open up a bank or building society account in the name of the trust or trustees. Your compensation award would be paid into this trust account. We’d also inform the relevant agencies of the existence of the trust.

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Why choose Hodge Jones & Allen?

A personal and sympathetic service

We offer a very personal and sympathetic service, always putting you first. We value our relationships with clients highly and have a dedicated team specialising in deputyship and trusts for people who have recovered substantial damages awards.

Good communication

We provide an efficient, fully-transparent service, always responding promptly. Our well-established and respected team also have many years’ experience of acting as deputy.

Experienced specialists 

We‘re highly experienced in this specialist area and offer high quality advice and pragmatic, cost-effective solutions to difficult problems. Our specialist experience of finance deputyship work combined with our knowledge of personal injury litigation, means that we can offer a top-quality service.

Independently recognised by legal directories

Hodge Jones & Allen solicitors are ranked for this area of law in the Legal 500, 2024 and Chambers UK, 2024. Our specialist team are highly experienced in handling such cases.

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“HJA have an excellent legal team in the private client department. The team are strong, organised, consistent and fair.” – Legal 500, 2024

In the 2023 edition of the Chambers & Partners directory, our Mental Capacity & Deputyship team was praised for “ensuring that challenges are faced with a collaborative approach for the good of the client” and that “their service has always been consistent, professional and empathetic.” 

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Client case

Personal Injury Trust for Road Accident Victim: Housing Benefit

We acted for a young woman who was injured in a road accident and was awarded compensation of £75,000 for her injuries. She is only able to work part time and receives Housing Benefit, which is only paid to people who have less than £16,000 in capital. Our specialist solicitors set up a PI Trust for her so that she could continue to claim Housing Benefit after receiving her compensation.

Call our highly experienced Mental Capacity & Deputyship team on
0330 822 3451
or request a call back.
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Frequently asked questions

Why do I need a Personal Injury Trust?

The primary purpose of a PI trust is to ensure that you can receive or continue to receive means tested benefits and local authority funding. Funds held in a PI trust are disregarded for the purposes of means testing. We can advise as to whether you’re in receipt of means tested benefits.

For means tested benefits, the general rule for capital is:

  1. If you have over £6,000 you are at risk of having your benefits reduced, and
  2. If you have more than £16,000 then you are at risk of losing your benefits entirely.

If you have more than £16,000 you would also lose other associated benefits such as free school lunches and prescriptions.

Can I continue to claim benefits if my compensation is held in a PI trust?

If your compensation is held in a PI trust, you can continue to claim benefits and you can still have the benefit of the money held in the PI trust, rather than see it eaten away by the cost of living.

Therefore a PI trust is extremely useful whether you currently receive benefits, or if there’s a chance that you may claim means tested benefits in the future.

If I went into residential care would a PI trust protect my compensation?

If you need to go into residential care at some point in the future, setting up a PI trust will protect your compensation as you will still be entitled to Local Authority funding for your care home fees.

How does a Personal Injury Trust operate?

Usually, you would be appointed as one of the trustees and you would choose a close relative or friend to act as the other trustee.

The money in the trust is to be used for your benefit. When you require funds you would submit a request to the trustees.

The trustees are under an obligation to take financial advice to ensure that the money is invested wisely. Your trustees are also under an obligation to always act in your best interests.

What can be put into my trust account?

The only money that can be put into the trust account is your compensation money.

The one year disregard

Any compensation paid in respect of a PI claim is disregarded for the purposes of means testing for a period of one year from the date that the first interim payment was made.

A PI trust must be set up within a year of the first compensation payment. The process can take a few months so steps should be taken to set up the trust well before the end of the year, otherwise there‘s a danger that your entitlement to benefits could be lost.

It’s a good idea to take advice during this period in order to discuss your plans with regard to the compensation and to decide whether a PI trust would be useful.

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