Q&As

Can a personal injury trust, effective at ring-fencing the compensation award for the purposes of means tested benefits, still be created where the compensation award has been mixed with non-personal injury award assets in a savings account? If so, will it be necessary to make an application to the Court of Protection to create the trust where the individual lacks capacity, but has attorneys acting for him under a registered Enduring Power of Attorney?

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Published on LexisPSL on 14/06/2016

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • Can a personal injury trust, effective at ring-fencing the compensation award for the purposes of means tested benefits, still be created where the compensation award has been mixed with non-personal injury award assets in a savings account? If so, will it be necessary to make an application to the Court of Protection to create the trust where the individual lacks capacity, but has attorneys acting for him under a registered Enduring Power of Attorney?

Can a personal injury trust, effective at ring-fencing the compensation award for the purposes of means tested benefits, still be created where the compensation award has been mixed with non-personal injury award assets in a savings account? If so, will it be necessary to make an application to the Court of Protection to create the trust where the individual lacks capacity, but has attorneys acting for him under a registered Enduring Power of Attorney?

To qualify as a personal injury trust, a trust may be in one of the following forms:

  1. bare trust

  2. discretionary trust, and

  3. life interest trust

For more on the different types of trust one may use to establish a personal injury trust, see Practice Note: Personal injury trusts.

The two essential components for a valid personal injury trust are that:

  1. a trust must be in existence, and

  2. it must contain money which is paid as a result of a personal injury to the person claiming benefits or funding for

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