Legal Advice - Protecting your compensation

Local legal experts discuss dilemmas that arise in matters relating to divorce and personal injury awards

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Successful personal injury claimants are often awarded significant sums of compensation following the successful settlement of a claim. Like any significant change in financial circumstances it makes sense to look at how this award can be protected both now and in the future.

Personal injury trusts can be useful tools to shelter awards of damages against a variety of threats, from the divorce courts to insolvency or even attack from unscrupulous individuals who may look to prey on vulnerable individuals for their own gain.

A personal injury trust can also be used to safeguard current entitlement to means-tested benefits, and entitlement in the future, should personal circumstances change. The value of the trust is ignored for the assessment of eligibility to most means tested benefits and/or local authority support.

There are many different types of trusts that can be used for personal injury compensation and Tinsdills can advise on which is most suitable for the client to ensure the correct type is used. This depends on the claimant’s needs, family circumstances and the possible involvementof the Court.

By placing the damages award into a Personal injury trust the claimant can appoint trustees with expertise in handling damages awards to assist and take some of the burden off their shoulders and provide the claimant with confidence that their damages award is being used appropriately.

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Personal injury trusts are not just for claimants currently receiving means tested benefits but are a way of preserving a claimant’s right to future benefits and future care as well as providing peace of mind to the claimant who wishes to protect their award.

We recommend that whatever the size of an award, consideration should be given to setting up a trust.

Peter HamiltonPartner, Wills, Trust andProbate SolicitorTinsdills Solicitors Sandbach01270 761111

Solicitors’ comments...

It is vital for anyone receiving a significant sum in compensation to seek independent advice and to consider all of the available options which may be open to them.

Personal Injury Trusts, in suitable circumstances, can be a very effective method of protecting and sheltering funds to secure the future of the beneficiary. Such Trusts are not to be entered into lightly. It is imperative that the terms of the settlement are drafted appropriately and that the trustees appointed are competent, trustworthy and able.

Proper advice at the outset can smooth the way and avoid difficulties and complications in the future.

Geoff Cogan, Senior Solicitor, Storrar Cowdry, India House, 21 Castle Street, Chester, CH1 2DS. 01244 400567.e-mail:

Placing your compensation into a trust is one way of trying to preserve the award, but if the award was made prior to marriage, then a pre-nuptial agreement should be considered. These agreements have become increasingly popular in recent years; you can also consider a post-nup should the award be made whilst you are married. Ultimately, the outcome of every case is determined only on the facts and the parties’ needs, so it’s imperative you obtain independent legal advice from an expert.

For further advice contact Lorraine Harvey, Principal Lawyer (Partner) at Russell Jones & Walker, part of Slater & Gordon Lawyers on 0161 383 3650 or Jones & Walker, 1st Floor, St James’ House, 7 Charlotte Street, Manchester M1