What is a Personal Injury Trust?
A personal injury trust is a legal wrapper for compensation you've received because of an injury you suffered. It ring-fences the money as disregarded capital, so it's no longer counted when the DWP assesses your entitlement to state benefits such as Income Support, Universal Credit, Housing Benefit, Jobseeker's Allowance or Employment and Support Allowance.
Most trusts are what's known as a bare trust: you remain entitled to the money throughout and can still access and use it, while the trust provides a clear paper trail showing where the funds came from. More complex forms exist, but these suit only specific circumstances.
Personal injury compensation can come from a court award, an insurance payout, or a government compensation scheme such as the Criminal Injuries Compensation Authority or the Armed Forces Compensation Scheme. Setting a trust up also means you're not managing a large sum alone: our team provides administrative support, can introduce you to an independent financial adviser, and acts as a buffer between you and family or friends who might otherwise ask for a share.
Situations Where a Trust Can Help
These are some of the circumstances where a personal injury trust is usually worth considering:
- You've received or are due a compensation payment
- You currently claim means-tested benefits
- You've had an interim payment already
- Your award relates to a birth injury or care needs
- You're managing compensation on behalf of an injured child
- Your settlement is large and difficult to manage alone
- You're worried about pressure from family or friends for money
- You want administrative support with a lump sum
- Your circumstances have changed since an old settlement
- You've started claiming benefits after a payment made years ago
- Your compensation relates to an industrial disease claim
Whatever stage you're at, from a first interim payment to a settlement received a decade ago, our team can help you work out whether a trust makes sense for you.
Do I Need a Personal Injury Trust?
You'll likely benefit from a trust if you're receiving compensation for a personal injury you suffered yourself.
- You claim, or may claim, means-tested benefits
- Your award is above £6,000
- You've received an interim or final payment
You want support managing a large sum
The complexity isn't in the paperwork, it's in getting the type of trust right. A bare trust suits most people, but using the wrong structure can create tax consequences that are difficult to unpick later.
Doing it properly means a proper meeting to understand your situation, the right choice of trustees, and a trust deed that protects you rather than a generic template.
Getting it wrong, or leaving it too late while you're already on benefits, can mean your compensation counts as capital, affecting your entitlement at the point you need it least. The £6,000 capital limit applies to most means-tested benefits, and local authorities and other benefits agencies apply their own limits too, for example towards care home fee funding.
Common Personal Injury Trust Arrangements
Bare Trusts
The vast majority of personal injury trusts we set up are bare trusts. You remain entitled to the trust fund throughout, the trust is transparent for tax purposes, and trustees hold the money on your behalf rather than controlling it outright. Once the trust deed is signed, trustees typically open a dedicated trust bank account, so the compensation is held completely separately from your own personal accounts.
Discretionary Trusts
In some cases, particularly where more control is needed, trustees hold legal ownership of the fund and decide when money is released rather than the client having automatic access. These suit specific circumstances, but they need careful drafting, since using the wrong structure can create tax consequences that are harder to unpick later.
Trusts Set Up for an Injured Child
Where a child has suffered a birth injury or similar, it's usually the parents who set the trust up and act as trustees, sometimes alongside a solicitor for extra support. The trust then holds and protects the compensation on the child's behalf as they grow up.
Trusts Following an Interim Payment
Personal injury cases often involve an interim payment long before the case finally settles. The same trust can be used for every payment that follows, including a much larger final settlement months or years later, so there's no need to set up a separate trust each time money arrives.
Trusts Established Years After Settlement
Some clients come to us long after receiving compensation, sometimes a decade or more later, because their circumstances have changed. Perhaps they've lost a job and are about to claim benefits for the first time. It's rarely too late to put appropriate protection in place, even years down the line.
How Long Do You Have to Set Up a Personal Injury Trust?
If you're currently claiming means-tested benefits, you have 52 weeks from the date you receive your compensation to settle it into a trust. That clock starts from your first payment, even if it's only an interim one, not from any later or final settlement.
Miss that window and the money is treated as capital, which can affect your benefits going forward.
If you're not claiming benefits, there's no equivalent deadline. Some clients set up a trust years after their settlement, once their circumstances change and they need the protection it offers. It's rarely too late, even if it feels that way.
Our team can put you in touch with our personal injury trusts solicitors as soon as your case settles, so nothing is left to chance.
That period of 52 weeks can feel tight if you're already dealing with recovery, which is exactly why it helps to have this conversation as early as possible.
How We Can Help
Managing a compensation award on top of recovering from an injury, or caring for a child who's been injured, is a lot to carry on your own. We handle the trust so you can focus on what matters. We can:
- Advise on whether a trust suits your circumstances
- Recommend the right type of trust for you
- Help you choose and appoint suitable trustees
- Draft a trust deed specific to your situation
- Act as a professional trustee where helpful
- Provide ongoing administrative support once it's set up
- Act as a buffer against unwanted requests for money
- Move quickly where a benefits deadline is approaching
Our approach comes from genuinely knowing this area. We've supported families managing compensation for decades, so we understand the practical questions that come after a settlement: what to spend on, what to protect, and how to say no to people asking for a share.
If your circumstances are more complex, involving a discretionary trust, multiple trustees, or a child's award that needs managing for years to come, we'll guide you through the extra considerations without adding unnecessary complication to a process that should feel manageable from the start.
If your case is also going through our own personal injury team, we can pick things up as soon as your settlement is agreed, so there's no gap between receiving your award and protecting it. We're upfront about cost too, including fixed fees and trust administration fees, and can introduce you to a financial adviser where that helps.
Frequently Asked Questions
Putting compensation into a personal injury trust protects it from being counted as capital when your means-tested benefits are assessed. Left outside a trust, the same money could reduce or remove your entitlement, so for many clients this is the main reason to set one up.
In most cases, yes. The majority of trusts we set up are bare trusts, where you remain entitled to the fund throughout and can still use it. Trustees hold it on your behalf and provide support, rather than controlling access to it.
If you're claiming means-tested benefits, you have 52 weeks from your first payment, even if it's only an interim one, to settle the money into a trust. If you're not claiming benefits, there's no strict deadline, and some clients set a trust up years after their settlement once their circumstances change.
In most cases, yes. The majority of trusts we set up are bare trusts, where you remain entitled to the fund throughout and can still use it. Trustees hold it on your behalf and provide support, rather than controlling access to it.
If you're claiming means-tested benefits, you have 52 weeks from your first payment, even if it's only an interim one, to settle the money into a trust. If you're not claiming benefits, there's no strict deadline, and some clients set a trust up years after their settlement once their circumstances change.
Trustees are often family members, such as parents acting for an injured child, sometimes alongside a solicitor for extra support and experience. We usually recommend two or three trustees in total, and we're happy to act as a professional trustee ourselves where that would help.
Broadly, anything you could own yourself: cash, investments and property are the most common. A small number of products, such as ISAs, have to stay in your own name by law and can't be held inside a trust, whatever its structure.
No. One trust covers every payment relating to the same injury, from an early interim payment through to a much larger final settlement, however much time passes between the two and however many payments arrive in between.
Yes, and it's completely understandable. Many clients hear the word "trust" and expect something complicated, restrictive, or out of their control. Most personal injury trusts are actually bare trusts, which leave you fully entitled to your own money throughout, with some extra protection and administrative support built in around it.
Yes. Many clients ask a specialist solicitor to act as one of their professional trustees alongside family members, particularly for larger or more complex awards. It brings the reassurance of independent legal advice and experience in trust law, alongside the practical, day-to-day support your family provides.
Why choose Drummond Miller?
Personal injury trusts are a genuine niche for us. Charles Ogilvie has spent two decades supporting families after a settlement, and that depth of experience runs through the whole team.
- Decades of experience supporting clients after settlement
- Trust set up handled alongside your personal injury claim where relevant
- One named point of contact throughout
- Willing to act as a professional trustee
- 8 offices across the central belt
- Full range of legal services under one roof
With offices across the central belt, most clients can meet us in person close to home rather than dealing with a faceless call centre or a solicitor they've never spoken to before. We take the time to understand each client's actual circumstances, rather than treating every trust as the same document with different names typed in.
We know no two injuries, families or settlements are quite the same, and that shapes the advice we give, right down to how each trust deed is drafted.
There aren't many law firms in Scotland that deal with personal injury trusts as regularly as we do, so you're getting genuine, specific experience rather than a generalist's best guess.
Speak to Our Personal Injury Trust Solicitors
If you've received or are expecting a compensation payment, talk to us before deciding what to do with it. If you're on a tight benefits deadline, we can move quickly to get things set up properly.
- Call us on 0131 226 5151