Personal injury trust - solicitor's client account

This firm currently holds funds representing a personal injury award, which it holds on behalf of a personal injury claimant. The claimant intends to use some of the money to pay debts etc. and will give the balance to her father in recognition of the help and support he has given her over the years. Giving money to the father will (I anticipate) amount to a deprivation of capital.

The individual is reliant on means tested benefits. She could use the money to establish a personal injury trust. Money in the trust will be disregarded for means testing and hence a payment to the father from the trust would not amount to a deprivation. However it is hardly worthwhile to establish a trust just for funds to move into it and then straight out.

Funds that this firm holds on client account are held in trust for it clients. My question is this: is there already therefore a de facto personal injury trust already in existence so that if funds are paid direct to the client’s father this will not amount to a deprivation.

Paul Davies

I don’t think it can be said that there is a ‘de facto’ PI trust in place on money held in client account. What are the terms etc… Although a pain, I think a formal PI trust/resolution/deed ought to be prepared confirming the conditions on which the money is held.

Haroon Rashid
I Will Solicitors Ltd