What does it cost to set up a personal injury trust?
I charge a fixed fee of £400 plus VAT, that is £480 in total. This price is current as at March 2023.
I will prepare a bare trust document, called a trust deed. I will coach you and the trustees through the signature process and the opening of a bank account. Once that bank account is open, I will give notice of the compensation and trust to benefit agencies. This tends to smooth the path and, I know, many people are nervous about contacting benefit agencies.
There is no ongoing charge. I am often asked about such charges, which I think might be charged if you appoint a professional trustee.
The way I work is set out here.
I prefer to work on a fixed fee, so we know where we stand. You may not be able to pay immediately, so do sk me about paying the fee from the compensation once the trust is set up.
Compare the cost with the benefits you receive. Compared to losing your benefits, the cost to set up a personal injury trust is very good value for money. A trust is the only legitimate way to protect your benefits, so you will come to see it as a postive thing.
I have heard of a wide range of fees charged for preparation of personal injury trusts. I think my fee is fair, but if you hear of a fairer one. do please let me know.
Personal injury trust fund to protect means tested benefits
49 thoughts on “What is the cost of a personal injury trust?”
Hi am I aloud to spend any the compensation before putting in a trust .?
My approach to compensation and trusts is to keep things simple. I suggest you pay all compensation into the trust and spend from there. If you spend direct from the trust, there are no real limitiations on ho wthe money can be used.
You can spend some compensation before setting up the trust, but I cannot five an easy answer. It depands on teh benefits you claim, if you have already received an interim payment and teh application of the rather confusing 52 week disregard. My only simple answer is not to spend the compensation before a trust is set up.
i’m anticipating a 20k claim, I currently live with my new partner (3 months in) and I don’t claim any benefits. She claims some child benefit / work and child tax credit for her children.
Do I need a trust? I don’t anticipate claiming any benefits for myself? Any thoughts?
The tax credits paid to your new household are based on income. The compensation will not be treated as income, but if you invest the money, income may be produced. There is more detail here.
If tax credits remain in place, it is likely you do not need a trust. However, if tax credits become Universal Credit, the compensation will prevent receipt of that benefit. So if Universal Credit is to become a factor, I suggest you have the trust in place before Universal Credit is claimed. Information about the change from Tax Credits is available.
Hi mark ive recieved an offer of 45k which i will recieve all of now i was told by my solicitor that they use a manchester firm who would set up the bank account n p.i trust fund for £600 plus v.a.t so what or how does that differ from your fixed fee please
I work on a fixed fee of £480, which includes VAT. I prepare the trust deed and then coach the trustees through the bank account opening process. I then give notice of the compensation and trust to benefit agencies.
I like to retain flexibility on the bank arrangement made by trustees. The banking situation has recently improved, as two banks now offer dual authorised online banking, which is a distinct improvement on a two signature cheque.
Hi mark ive just accepted a very large offer for a injury I had in work over 2 years ago. I’m currently claiming universal credit as a joint application for both myself,wife & 2 children. My case manager had explained about a injury trust set up which I’m more than happy to go along with but with it being so close to Xmas I wanted access to it as quick as possible but they have said it would take 2 months to complete and cost £900 which would be taken out of the payment Is this right?
Have you had an interim payment? If so when and how much? If you have received an interim payment, all further compensation should be pad direct to the account set up by your trustees.
If this will be the first payment of compensation, you can receive a small amount of the compensation. Look at your finances as a whole and make sure you stay way below the £6,000 line. You must make no further transfer to yourself.
Opening bank accounts is difficult at the moment, but I have many clients who have accounts set up in a shorter time than two months. The way I work is explained here.
When setting up a trust do you have to use the same solicitors that dealt with your case or can you use an outside source as I’m having allot of problems with my current solicitors and would prefer not to work with them further once my claim is over…
I cannot imagine you are contractually bound to use the same solicitor.
I had a bad car accident nearly three years ago and awaiting my 2nd offer my 1st was for 28k minus the solicitors fee of 25% so i know I will be receiving over 20k and will need a trust. My question is can this be set up with trustees without going into a bank? How would it would work if just me and another was trustees and in the current world where cheques ain’t always accepted how could I thne spend the money? One last question if I paid a cheque amount to someone and they transferred me that money would that still be frowned upon by dwp
Your last point first. What you describe is benefit fraud and you could be prosecuted. There is no nee dto resort to such measures.
I think you are asking about opening a bank account in the current medical situation. There are options, but most banks still require a personal meeting to open the account. Th esituation seems to be easing and clients are starting to open accounts now.
Cheques can be limiting. Banks are starting to use dual authorised online banking, which looks helpful. The trustees can authorise a particular purchase can be made by credit card, which does bring trusts into the 21st century.
If you need a trust to protect benefits, do not use the inconvenience of a trust to put you off. Please read about trusts from a positive point of viewpositive point of view.
Hello my mother is going to receive 49k which is going to be sent to her bank account. However I want to set her a trust fund to protect her benefits. But she wants to give me half of the compensation. If she opens a trust fund is she able to still give me half? And if the 49k goes into her bank account but she then sets up a trust fund and puts it into a trust fund will her benefit still be protected?
If this is the first payment of compensation, it will be ignored for one year by benefit agencies. This is calle dteh 52 week disregard.
The compensation shoulod not be spent in this period, just held until a trust can be set up.
I will need instructions from your mother. The way I work and the fixed cost of £480, including VAT, is explained here.
The trust will be written for your mother’s benefit. Given a wide interpretation, that means anything she wants or needs. That includes making gifts. Such a gift should only be made fron the trust, not from personal funds. If the gift is made from personal funds, benefit agencies will treat your mother as still having the money and stop her benefits.
Could you please confirm if I correctly understood your previous answer about IVA as I also on receipt of benefits and due to assault last year on me couldnt manage to repay all my debs so used IVA help to solve this. But now when I finally will get a compensation from the assault I must notify my IVA Supervisor and pay off all remaining debs?
Found this quote from IVA agreement:
“Should sufficient funds be introduced by way of such windfall or inheritance to pay in full all of the amounts due to my creditors at the date of approval of my Arrangement, together with the fees and costs as specified in this Proposal and the attached Appendices, prior to the end of the period of the Arrangement specified in Section 10, then:
• no statutory interest will be payable in addition to those amounts due to my creditors at the date of approval of my Arrangement, and
• my Arrangement will be seemed to have been satisfactorily concluded, and
• the Supervisor will be authorised to bring my Arrangement to an early conclusion without the need for any further creditor approval.”
Should I create a trustee or in such situation have no choice as only let them know as soon as I receive it?
Thank you very much Mark
I cannot offer advice on your IVA, as I do not have the agreement.
The compensation you are to receive is not included in the section you have quoted from the IVA, but you have only sent a small section.
A bate trust to hold personal injuy compensation will not protect the compensation from your creditors.
Th eanswer lies in the IVA.
I am a single mum on benefits, I have a perso al jury claim from a car accident whilst pregnant i also suffered from PTSD fromt he accident the claim has been settled but I havmt received the money yet they have asked if I’d luke a trust, its coming up three years for 21k how will this effect my benefit? I was planning to pay of the 8k dept I have dur to not being g able to work, I ow my parents 2000 and need to pay for some further back treatment of about 1000-4000 I need to upgrade my car 1000as where ei live is the middle of no where, ands it’s on it last legs, im also being threatened with evictions and need first months rent and deposited for a house I was hoping what ever was left I could save towards a mortgage of my own, can I spend any of the money before getting a trust? Also if I dont get one will my benefits be stopped altogether? Any advice wod be much appreciated? Tha.ks
If you receive £21,000 in compensation, you will no longer be entitled to means tested benefits. If you have between £6,000 and £16,000, your benefits will be reduced.
You have some debts to pay and purchases planned, but even if they take you below £16,000, your benefits will be reduced.
I should add, that paying debts and buying what you think you need, may not be accepted by benefit agencies as reasonable expenditure. A good example is repaying a loan from a family member. A benefit agency is going to take a cynical view. If not treated as reasonable, you will be treated as still having the money you spent.
You need a trust. The compensation held in trust will be ignored for benefit purposes. Provided you avoid the necessities for which benefits are intended, you can spend as you like direct from the trust. A trust is allowed by the benefit regulations, which recognise the compensation has been paid to you because of your injury.
I charge a fixed fee of £480 including VAT and the way I work is set out here.
Hi my partner is going to be receiving a compensation payout after a motorbike accident I was wondering bid you could help we currently claim universal credit and it will be more than 6 k we don’t have the money before the pay out to set up a trust I read that you can have it come out of compensation how do I go about this also your truste do they have to have any specific requirements like good credit rating ect also with you only be able to use cheque with the trust fund
Your understanding is correct, in that compensation over £6,000 will reduce your benefits.
I will accept payment from the compensation, rather than up front.
Trustees must be at least 18 years of age and, as the term suggests, you must trust that person.
For a trustee to open a bank account for the trust, the usual bank checks will be made. The trustees will be opening the most basic form of bank account, which will have no overdraft facility. I would suggest the checks should not be too severe, but it is a matter for the bank to choose its customers, rather than a matter of law.
Hello Mark, I am in the litigation stage of my claim. After being hit by a dangerous driver on a zebra crossing whilst pregnant just over 3 years ago. Whilst what I am likely to receive is not substantial due to the bad handling of my case early on, it is still going to be over the threshold so I am aware that I will need to have a trust drawn up. I would like to come to you for that because I appreciate your straightforward approach and informative answers you provide. I have a few questions, firstly would it be possible to pay you for this from the compensation directly? Secondly, I am aware of the £6k-£16k and wondered if I would be able to take £5.5k from the compensation before paying the rest into a trust? I do not have any other savings and would ensure I do not end up with more than 6k. Also have things changed now with dual authorisation banking online? And how do the trustees physically sign off on payments usually? Kindly awaiting your response, thank you
You are right to be thinking about a trust now and the time to preprae the trust is when you know money is on the way.
I will agree to be paid from the compensation.
You can make a once only transfer to yourself, but stay well below the £6,000 line. Even when spent, you may be treated as still having that money, so your balance could creep above £6,000. There is more explanation here.
Dual authorised online banking and the telephone banking system used by Metro Bank, are a great improvement on having to work with two signature cheques. The link above tells you of other ways to spend.
Hi I had car crash 2015, been on ESA & PIP.HAVING £25K paid soon, also £28k being paid to DWP.
Do I need a PI trust??
Do I still get benefits after payment
A trust for personal injury compensation will allow means tested benefits to be paid to you, the compensation in the trust being ignored.
The benefit regulations include the ability to hold compensation in trust. If you receive means tested benefits, or are likely to do so in the future, a trust for personal injury compensation is what you need.
Hi, I receive Stamp paid ESA and PIP, also IIDB. I had a bad accident at work 3 years ago. Just found out about potential impact on benefits. I was hoping as my ESA is stamp based, it will not be impacted, nor would PIP, but IIDB i am unsure. I am due £276,000 paid on Monday. Am i too late to setup a trust? Or do i need one? I was planning to pay off mortgage, £132k, all debt, refurbish the whole house, as i cannot work again, i can just spend as i wish? Or will DWP be chasing me up? On expenditure? What is not great when you figure out you’ll never work again, and your only 47
Personal Independence Payments and Industrial Injury Disablement benefit are not means tested benefits.
Your contributions based Employment and Support Allowance will only be paid for a limited time. If you then want to claim Income Related Employment and Support Allowance, or any other means tested benefit, you must have the compensation in trust.
It is often overlooked, that a trust also protects the compensation from the financial assessment should you ever need care.
I think there are good reasons to rein back your plans, look ahead and consider doing what you plan through a trust.
I have received compensation money and need to set up a compensation protection trust as I receive ESA, work related benefit and the compensation puts me over the 6k ceiling. Can we arrange the trust without meeting as I do not live locally. I look forward to hearing from you.
It is always good to meet clients, but this is something usually dealt with by email or post.
We need a cha first to make sure a trust is required, so please call when convenient.
I have a large sum of compensation due to be paid to me very soon, I have received benefits in the past but have found a suitable job and start in the next few days. I want to spent the compensation on buying a house. Do I need a trust?
A trust for personal injury compensation ring fences the compensation from the means tested benefit financial assessment, plus the financial assessment undertaken for care by local authorities.
If the house is bought by the trust, it will be outside any financial assessment if you ever need care. That looks like a very real benefit.
Hi mark. I am die to receive 13000 half of this will be paid out straight away on debts, I will have 6000 left over in my savings account so do I need a trust? And do i need to declare 13000 or just the 6000 remaining to the benefits agency? Kind regards
Do not pay the debts immediately from your personal bank account. The important points are:
1. Assuming this is the first payment of compensation, contact benefit agencies and tell them the debts you plan to repay.
2. If you receive clear agreement, preferably in writing, pay the debts and, if your remaining money is below £6,000, you do not need a trust.
3. Benefit agencies can be sceptical if you owe money to family and friends.
4. A benefit agency may ask why you are running up debts when you are receiving benefits, so why should they accept repayment of the debts.
5. If you do not get benefit agency agreement to your plan, set up a trust and repay the debts from the trust, not from personal funds.
I suggest this approach to avoid you creating a more difficult situation. If you repay the debts from personal funds and then find the benefit agency does not accept the payments, you will be treated as still having the money you spent and your benefits will be reduced or stopped.
If this is the first payment of compensation, you have time to sort this out, so take that time.
Iv been offered a cica payment if £16,500 .i was old I need personal injury trust to put it in to stop it affecting my benifits. I want my mum as trustee but every bank iv asked says that because I’m over 18 I cannot have a trust fund, could you help me set up a trust fund at a cost ? . Do you know of a bank that allows personal injury trust funds.
It is easy to be confused.
If you receive means tested benefits, you will need to hold the compensation in a trust to keep your benefits.
You can’t go straight to a bank, as you first need a trust deed, this being the legal document which creates the trust. Once you have that deed, the trustees can open a joint bank account.
This is explained here.
I will be happy to help.
I had a car accident resulting in injuries which I still suffer from now as well as mental health issues caused by a serious car accident. I was off work for 9 months and was made redundant a few months after returning to work-not related to injuries. I was struggling to drive which they had been flexible about as I was a ‘remote worker’ and could work from home, managing my own diary if I had to visit sites. I am now working a temp job locally as mentally and physically I cannot get the same job with another company due to the amount of travelling required to an office base and sites. I am earning 1/2 my previous salary and cannot survive after this month. I have finally had news from my solicitor that the other parties insurance company have admitted full liability. I have an IVA and I am hoping to pay this off but worried that if the settlement isn’t enough to pay it off in full with some left over for my future that I will lose all monies related to loss of future earnings to the IVA and have nothing to future proof my remaining working years. A trust fund was mentioned but does this mean that the IVA Would not be entitled to take it? Many thanks in advance.
The answer lies in the IVA. Usually, the earnings loss element of personal injury compensation is available to your creditors, but do check the terms of your IVA.
The type of trust used for personal injury compensation is a bare, or simple, trust. This type of trust offers no protection against creditors. There are other types of trust, such as a discretionary trust, but such a trust specifically set up to hide money from your creditors will be objected to.
The trusts dealt with here, are to legitimately protect a person’s entitlement to means tested benefits. If you receive, or may receive in the future, means tested benefits or financial help with care, then a trust is the answer for you, at least so far as benefits are concerned.
Mark i am due a payout of 13 thousand but i don’t have family or friends to be trustees and i get benefits inc pip and carers for my son. Is there anything else i can do. I am very stressed
The benefits you mention are not means-tested. If you do claim means-tested benefits, you will need a trust.
As the amount of money is not great, you could get away with being a trustee yourself plus one other. You would have the security of holding the cheque book and knowing your signature is necessary for a financial transaction. On that basis, is there someone who can help you and be a trustee?
My Partner had an accident at work 3 years ago where the company he worked for have admitted full liability, however, due to complications with his injury he is still having corrective surgery on his foot and ankle. At the beginning he was receiving weekly insurance payments of around half his wages to live on but they stopped after two years. He then had an interim payment of £12000 as he had mounting bills to pay. His solicitor at the time kept saying about setting up a trust fund as it would affect any benefits he was getting and set up an appointment with his colleague in the financial section of their firm. The lady he saw pretty much said the same thing about it affecting his benefits and to go out and find a suitable bank account but my partner was living off this money at the time so panicked about not being able to get hold of it. He cleared his debts and later down the line got another interim payment of £10,000 to live off. After his 3rd operation he moved in with me last year and his new solicitor, his previous solicitor retired, applied for another interim payment of £28,000 which he put in his bank.
This year I lost my job and we have ended up on a joint jobseekers claim even though my partner is still signed off sick and awaiting a further operation. My partner had found out in May, from his loss adjuster, that he was no longer employed by the company. We were open to the benefits people as to the fact he has had personal injury payments and they could see the last one on his bank statements. He has applied and received a further interim payment of £10,000 and we were looking at now setting up a trust fund as we are on benefits. On contacting the solicitor she put us on to her colleague again. We received an email from her last night saying that since the 1st payment was over 52 weeks ago she does not think a trust fund is any good for us now but would like £250 +vat payable at the meeting to give us more advice.
It may seem that we are naïve and about money we are but my partner never wanted to go onto benefits and all he wants do is get back to work and all this is scaring him and making him very depressed which is worrying to me as he is already being treated for ptsd in connection to his accident.
This is a good example of doing everything in the wrong order.
A trust for compensation can be set up at any time. There is NOT a rule which demands a trust be created within 52 weeks of the first payment of compensation.
The problem created by the passage of the 52-week period is that money received during and since that period will count against benefit entitlement. It will be treated like any other money held, subject to the dissipation of capital rules.
I have found benefit agencies to be quite helpful in situations like this. They may feel supportive of someone who has lived independently and accept that had the trust been set up years ago, the compensation would have to be ignored.
Set up a trust now, as at least it gives the prospect of claiming benefits at some point in the future. It will also protect the remaining compensation should care be required.
Hi i have been told by my solicitor that i need to set up a Trust due to a medical negligence clam as my clam is due to come to a end i am on benefits, how do i go about doing this, and who can be the trustees, can it be my son who is in the army and my son in law who is in the army as well or does it have to be financial advisor or some one like this, when do you have to pay, What is the charge or fee for preparing when do you have to pay for this. hope you can help thank you
There is no set list as to who may be a trustee, save a trustee must be at least 18 years of age. The most important points are that you trust the person and they will work with you as to investment and expenditure of the compensation.
The way I work is explained here.
I charge a fixed fee of £480 which includes VAT and you can pay me from the compensation.
Dear Mr Thompson
My wife is due a compensation payout for a personal injury claim. The amount she will receive is 15.000.00. we are on benefits. Please advice on setting up a PI Trust.
With that amount of compensation you need a trust, as it will almost wipe out your benefits.
A good starting point which sets out the points you must consider can be found on this website.
I came across Marks website via a google search for solicitors that do trusts for personal injuries.
Suffice to say it was the best google search I ever had.
After reading his articles I contacted Mark as I was due to receive a final settlement shortly and needed a trust setting up as I am in receipt of benefits and did not want any monies to be taken into consideration as capital and thereby making me ineligble for benefits as compensation is meant to put you in the position you would have been in but for the accident.
Mark asked me for various information about the accident and how much the settlement would be. He needed various documents to verify myself and trustees. All this was done by email which was brilliant for me as I do not like using the phone and do not cope well with stress. Mark has made this all so stress free and simple to achieve. It has been brilliant to come across a consumate professional who has made everything easy to achieve and not made me feel stupid or inadequate in any way. I only wish I had come across him sooner when I needed a professional to fight my case. I only settled as it was seven years and ongoing and I was destitute and could not carry on any longer.
I cannot reccommend him enough.
If you need a personal injury trust setting up HE IS the man.
Hi i am due compensation of under 6grand for personal injury from a car accident, my husband works low income, in reciept of HB, tax credits, cb and ctc will we lose amy benefits due to compensation payout? We have no savings amd are in debt whicb most of the compensation will be spent on!
If the household has very little money and the compensation will not take you over £6,000, then you do not need a trust.
You still need to tell benefit agencies about the compensation.
How you use the money is important. If expenditure is not considered reasonable for someone receiving benefits, you will be treated as still having that money. This is called notional capital, which can create a problem should your finances ever improve a little. Benefit agencies do not tend to object to paying off loans, but they can be sceptical if the repayment is to a friend or family member.
I have criminal injury compensation payment of 15 000 and I am having 156 taken from my benefits because of this. Can I set up a trust at this point or is it too late.
You should not be losing benefits because you have received personal injury compensation.
You can set up a trust now as there is no time limit on when a trust can be established.
If much time has passed it may be difficult to show what money is compensation and what is not.
Benefit agencies sometimes believe a trust must be set up within one year of receipt of the compensation. This is a misunderstanding of the rules, but it does sometimes create a problem.