If you or a family member receive a lump sum due to an injury, setting up a personal injury (PI) trust can help manage and protect the funds as part of your financial planning.
What is a personal injury trust?
A PI trust enables a person who has been compensated for an injury to keep and manage their money so that it is not included in the calculation of care contributions or means-tested benefits.
What are the main attractions?
When you place any injury-related payments into a PI trust, the Department for Work and Pensions (DWP) and local authorities will not take them into account when determining whether you qualify for care contributions or means-tested benefits. After the first year, you might not be eligible if you don't have a trust.
Benefits maintenance is not the only benefit of utilising a PI trust; some injured persons may not receive benefits but do not want their injury money to be used for medical expenses, and others may wish to safeguard the fund from outside parties. Some will only require assistance in handling it.
What can be included?
Any funds received in connection with the injury can be held in the trust. This could include damages, insurance payments, charity and JustGiving donations and other compensation.
When should I set up a PI trust?
You can set up a PI trust at any time, but to work most effectively, it should be set up within 52 weeks of receiving the first payment due to the injury. Any payments held outside the PI trust after that 52 weeks may then be taken into account by the DWP or local authorities when they calculate benefits.
Can anyone set a PI trust up?
Anyone who receives a personal injury payment can set up a PI trust. However, in the case of adults with incapacity someone may need to do this for them, either by having Power of Attorney or a Guardianship order. Where the injured party is a child, the child’s parent can often set up a trust for them. In all cases, trustees need to be appointed.
How many trustees should I appoint?
Assuming you are capable, you can be a trustee. We recommend appointing a further two individuals of your choosing. The other trustees can be family, friends or professional advisors. Three trustees represent safety in numbers and allow decisions to be made by majority.
How much does a PI trust cost?
The costs of setting up and managing a personal injury trust will vary from case to case. We can meet clients for a free, no-obligation initial meeting and after the discussion will provide you with a fixed fee for the trust formation.
Getting in touch
If you would like some more advice on personal injury trusts, please contact us or complete our contact form and one of the team will be in touch with you shortly.
Published 22 May 2025
