We would advise that you set up a personal injury trust at the earliest opportunity. This may be at the point you receive a first interim payment from the claim, but may be at final settlement. If you have a solicitor acting for you in your claim, they should advise you when to consider setting up a personal injury trust.

You may have a period of 52 weeks during which payments you receive are disregarded for the purpose of assessment for means-tested benefits. When this 52-week disregard period ends, the balance of the payment you are holding will likely be included in the assessment and you may affect or lose your entitlement to means-tested benefits.

The following thresholds apply to the eligibility to means-tested state benefits:

• If you hold capital in your own account(s), or in a joint account(s), above a value of £16,000, you will not be eligible to claim means-tested benefits until your capital drops below £16,000.
• If you hold capital between £6,000 and £16,000, your entitlement to means-tested benefits will be restricted on a sliding scale, with those holding capital closer to £6,000 having greater entitlement.
• If you hold capital under £6,000, you will have full entitlement to means-tested benefits.

These thresholds are relevant to you and anyone in your household who is treated as being part of your family unit for the purposes of assessment.

It is possible you may receive funds from your personal injury claim, which will mean that you will hold more than £6,000 or perhaps even more than £16,000 (either as a result of an interim payment, or a final award or settlement). As a result, your compensation may affect your entitlement to means-tested benefits or mean you lose all entitlement to means-tested benefits.

However, if you were to hold your compensation within a personal injury trust, the funds (both capital and income) become disregarded for the purpose of the financial assessment and as such will not affect your entitlement to means-tested benefits. This will be the case as long as the personal injury trust is holding the funds, or they use those funds to buy assets held in the trust, such as a home to live in.

Yes. If you are not currently eligible to claim means-tested benefits, a personal injury trust may still benefit you for one or more of the following reasons:

• It could give you the opportunity to claim means-tested benefits if you later become entitled due to a change in your circumstances (for example, if you became unemployed).
• It will protect/disregard the funds should you later require residential/nursing care for which you are financially assessed by the local authority.
• If your mental capacity should deteriorate - possibly as a result of your injury - your trustees could continue to use the funds for your benefit. You should consider setting up a lasting power of attorney.
• It is possible that a personal injury trust may give some protection against divorce or bankruptcy. If this is a concern, you should seek specialist advice from our team. It may be appropriate to consider a pre or postnuptial agreement.
• Your trustees can provide assistance with the management of large sums of money.

Your ability to work will be determined by the severity of your injury and how it has impacted your life. You may be able to return to work as you did before your injury, or your working conditions could be managed to accommodate your condition following the injury. However, you may not be able to work for as long or under the same conditions as you did before. A personal injury trust could be created should your circumstances change now or in the future, or supplement your income as you continue to work, or you may consider using the structure for wider estate planning to benefit you and your family.

If you are able to stay in work but require additional support or for your role to be modified, your employer must make adjustments so you can continue in your role comfortably - if your employer fails to do so, or treats you differently, this could be classed as discrimination and JMW’s employment solicitors may be able to assist you with.

As soon as your compensation is put into the personal injury trust, the funds are administered by your trustees. You will choose who you wish to act as your trustees. If you want to be a trustee, we can discuss this with you. If at any time in the future you wish to change your trustees, you will have the authority to do so.

When you wish for the personal injury trust to use the funds for your benefit, all trustees will need to agree. However this doesn’t necessarily mean they can prevent you accessing the funds. The trustees must act in your best interests at all times, and so you should think very carefully about trusted friends and family members who you would wish to act as trustees.

The only funds that can be held in a personal injury trust are those that derive from a claim for personal injury. If you hold part of your settlement in your own account (for example, during the 52-week disregard period), you must ensure that the funds do not become mixed with non-personal injury funds, especially if you intend to set up or transfer the funds to a personal injury trust at a later date. We recommend that you set up a personal injury trust at the earliest opportunity, with funds being transferred straight to the trust from your acting solicitor (if you have one).

Whether or not it is appropriate to create a personal injury trust is very much dependent on yours and your family's circumstances.

We will discuss this with you, and consider your financial circumstances and intentions for the funds going forward to advise on whether a personal injury trust is appropriate.

If setting up a personal injury trust is not appropriate, we will advise you of the best course of action. Where necessary, we will put you in touch with an appropriate independent financial advisor to offer and discuss any financial guidance that you require.

We would be happy to discuss a personal injury trust with any prospective client, even if JMW is not acting for them in the claim. If you client would like to speak to JMW, they can contact us directly or you can make an introduction.