A Compensation Protection Trust can provide crucial financial security and peace of mind for individuals who have received a compensation award following a personal injury, medical negligence, or accident claim. At The Law Firm Group, our specialist solicitors help clients across the UK safeguard their compensation, ensuring it remains protected while supporting their long-term welfare and independence.
What Is a Compensation Protection Trust?
A Compensation Protection Trust—sometimes called a Personal Injury Trust—is a legal arrangement designed to hold and manage compensation payments on behalf of the injured individual. By placing compensation into this type of trust, you can protect your entitlement to means-tested state benefits and ensure your funds are handled appropriately for your needs. This structure is especially important for those who have received a substantial lump sum following a successful claim, as it helps prevent your compensation from affecting your eligibility for certain benefits or care support.
When Might You Need a Compensation Protection Trust?
There are several situations where establishing a Compensation Protection Trust is advisable. If you or a loved one has received a compensation award as a result of personal injury, clinical negligence, or an accident, you may be at risk of losing means-tested benefits such as Universal Credit, Income Support, or local authority care funding. Even if you do not currently claim such benefits, your circumstances could change in the future. Setting up a trust at the earliest opportunity can provide valuable flexibility and security.
Typical scenarios include:
- Receiving a significant compensation payout for personal injury or medical negligence
- Concerns about future entitlement to means-tested benefits
- Wanting to safeguard compensation for vulnerable individuals, such as children or adults lacking capacity
- Ensuring compensation is managed responsibly and in line with your wishes
How Does a Compensation Protection Trust Work?
Once your compensation is paid, the funds are transferred into a specially drafted trust account. The trust is managed by appointed trustees—often including yourself and trusted family members, or professional trustees. The trust can be tailored to your needs, and the funds can be used for your benefit, such as for care costs, rehabilitation, or improving quality of life. Importantly, money held in a Compensation Protection Trust is disregarded for most means-tested benefits and care assessments.
Our expert solicitors at The Law Firm Group ensure that your trust is set up correctly, compliant with current legislation, and aligned with your personal circumstances. We provide clear legal advice on trustee selection, trust management, and the practical steps required to protect your funds.
The Legal Process: What to Expect
Initial Consultation and Understanding Your Needs
Your journey with The Law Firm Group begins with a confidential discussion with one of our specialist solicitors. We take time to understand your individual situation, the nature of your compensation, and your future plans or concerns. Our approachable team provides clear, jargon-free explanations so you feel confident in your decisions.
Reviewing Your Compensation Award
Our solicitors will review the terms of your settlement to ensure a Compensation Protection Trust is the right option. We will explain how the trust works, the advantages it offers, and any potential implications for your benefits or tax position.
Drafting and Setting Up the Trust
Once you are ready to proceed, our legal experts will draft the trust deed, ensuring it is tailored to your specific requirements. We will guide you through the process of appointing trustees, setting up the trust bank account, and transferring your compensation securely. Our team handles all necessary paperwork efficiently, minimising stress and disruption.
Ongoing Guidance and Support
The Law Firm Group is committed to supporting you long after your trust is established. We offer ongoing legal advice for trustees, help with annual trust administration, and are available to answer any questions as your circumstances change. Our transparent approach to costs ensures you always know what to expect, with no hidden fees.
Common Issues and How We Help
Clients often have concerns about eligibility for means-tested benefits, choosing suitable trustees, or the practicalities of using trust funds for day-to-day expenses. The Law Firm Group’s solicitors have extensive experience in all aspects of Compensation Protection Trusts. We provide practical guidance on:
- Protecting your entitlement to benefits and care funding
- Managing trust accounts and record-keeping
- Trustee duties and responsibilities
- Accessing trust funds for reasonable needs
- Reviewing trusts if your circumstances change
Our priority is to ensure you feel informed, empowered, and protected throughout the process. Whether your situation is straightforward or complex, you can rely on our expertise and discretion.
Benefits of Choosing The Law Firm Group
By working with The Law Firm Group, you are assured of:
- Clarity: Clear, understandable legal advice tailored to your needs
- Protection: Safeguarding your compensation and benefits for the long term
- Peace of Mind: Confidence that your interests are prioritised at every step
- Efficiency: Prompt, streamlined service from experienced UK solicitors
- Transparent Costs: Fixed fees wherever possible, with open communication on all charges
- Ongoing Support: Continued access to expert legal advice as your needs evolve
Getting Started with The Law Firm Group
To begin the process of setting up a Compensation Protection Trust, simply contact The Law Firm Group to arrange an initial consultation. Our approachable solicitors will discuss your situation and explain your options in plain English. We will review your compensation award, advise on the best trust structure, and outline the steps required to get your trust established efficiently. Throughout, you will receive personal attention and practical support from a dedicated team of specialist solicitors.
Protecting your compensation is an important decision. With The Law Firm Group’s expertise and commitment, you can move forward with confidence, knowing your future is in safe hands.
