How to choose between the different types of trust

Personal injury trusts are often considered in the context of the injured person having full capacity and being the settlor. However, they can also come into existence through a court order during or at the end of a personal injury claim. Such trusts are established on behalf of an injured person with or without impaired capacity. Watt v ABC (see Practice Note: The Court of Protection versus personal injury trusts) suggests that such orders may be made either by the court which hears the claim and makes the award or the Court of Protection, but concedes there are jurisdictional issues to be clarified. While these notes assume the injured person has sufficient capacity to establish the trust, the analysis of the different types of trust are relevant to preparing a trust for the court to approve.

It follows that assessment of capacity of the injured party to establish a trust is crucial, as if there is doubt the court will need to approve the trust.