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Can I Buy A Home With My Personal Injury Settlement? The Truth

Can I Buy A Home With My Personal Injury Settlement

After injury compensation, can I buy a home with my personal injury settlement? Well, a personal injury settlement can provide a victim of negligence with financial help. The help covers medical expenses, lost wages, non-tangible losses, and other expenses.

There are multiple methods for an injured victim to receive compensation following the conclusion of a personal injury suit. Alpharetta personal injury lawyer will help you access the funds, whether they are already in a personal injury trust or will be there shortly. 

This will help you achieve your proposed use. This article examines the guidelines for purchasing a home with funds from a personal injury trust. It describes everything from how the trust operates and how to buy a home.

Can I Buy A Home With My Personal Injury Settlement 

Yes, you can buy a home with your personal injury settlement. However, since the money in the trust is not legally yours, any property purchased belongs to the trust and not to you as the beneficiary.

The provisions of the trust deed will dictate to the trustees the types of investments they can make. They’ll also dictate how the funds they manage can be used, such as purchasing a home or paying off an existing mortgage.

Personal Injury Settlement Explained

A personal injury trust is a form of trust established for injured individuals who receive compensation.

Like any other trust, it safeguards and manages assets, in this case currency, without preventing the beneficiary from accessing them. 

Trusts are typically the best option for people who are too young or have health issues that make it challenging to manage their finances.

Personal injury trusts are also needed, even for individuals who manage their finances. The benefits they provide immediately safeguard the beneficiary’s funds and prevent reimbursement payments from causing more harm than good.

A personal injury is more likely to have a significant long-term impact on your quality of life. With this, you can use some of your compensation to purchase a home accommodating your new physical needs.

This includes a bungalow, ground-floor apartment, or even a custom-built or specially adapted home. You could also use some funds to reduce your mortgage debt.

In any event, you must determine how much money you will need to achieve your objective. You must request this amount from the administrators of your trust fund.

You will need two to four guarantors to help you manage your finances. The ideal adult individuals could be your friends and relatives who will step up as your trustees. 

Then, you will help you create a trust deed. This will outline the rules under which the trustees, on your behalf, can spend and administer the trust’s funds.

Spending Personal Injury Settlement

A personal injury trust can be set up by anyone compensated for a personal injury. This applies to both a court case and an insurance payment of the compensation. 

If this is impossible due to a disability or other reason, an attorney can establish the trust on behalf of the beneficiary.

Have your trust set up as soon as possible. Even if you’re well within the waiting period and have no plans to receive income-based benefits. 

Once the trust is established, it will be available to acquire assets. You verify that the money does not wind up in your accounts mistakenly.

This is particularly essential if the compensation is paid in multiple installments. The 52-week term only pertains to the initial payment. 

Hence, any additional payments must be placed in a trust to prevent them from counting against benefits.

The money in a personal injury trust can be used however the beneficiary deems most beneficial, as long as it aids them. 

When purchasing a home as an investment, it cannot be done in the name of the proprietors to avoid affecting means-tested benefits.

In addition, the property belongs to the trust since the money in a trust does not legally belong to the beneficiary.

Purchase a house with a personal injury trust correctly for it to become the trust’s property. This way, it will not affect your income-based benefits.

Personal injury settlement and marital property

In personal injury cases, the beneficiary typically retains their private property. This creates an incentive that does not belong to the couple, as it is the individual’s own award. 

A few exceptions exist, such as when the companion uses the money to pay for the nuptials. When the court schedules a hearing to determine whether this money is marital property, it is also removed from the marriage. Depending on the jurisdiction and the court, the award may alter with the division during a divorce.

The standard norm for personal injury awards is that the money awarded has no relation to the marriage. Even if the couple divorces, these funds will not be included in the settlement. 

Depending on the judge’s decision, all money, accounts, and personal property must be divided when the assets are divided. There are also debts and additional obligations. This judge’s decision will determine the rule.

 In contrast, personal injury settlements are typically not deemed marital property because the money goes to the injured party, not the couple.

Personal Injury Settlement And Community Property

In a personal injury settlement, the distribution of property is subject to specific guidelines. When a personal injury settlement includes compensation for pain and suffering, the entire settlement belongs to the injured party. 

The argument is the injured individual is the one who experienced the compensated injuries alone.

However, many personal injury agreements include compensation for lost income, lost ability to earn money, and property damage. These losses, often called economic damages, are community property. 

Similarly, if a couple uses money from a personal injury settlement to purchase property, that property may also become community property. 

For instance, if a couple uses money from a confidential injury settlement to buy a new home, the purchase is considered joint and divided in half.


Navigating through the process the right way can be a daunting task. If you’ve been injured, you should speak with a personal injury attorney and, when you’re ready to resolve, a family law attorney.

Both types of lawyers are familiar with these issues and will work to defend your interests in the event of a separation or divorce.

Jacob Lindsey

Jacob is a home remodeling guru having worked over 15 years in construction in Reno, NV, mainly focused on home renovations. He likes taking ideas from his clients and making them a reality.

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