A blind trust is a living trust that is completely controlled by the trustee. The settlor – that is, the person who assets fund the trust – and the beneficiaries have no control over or knowledge of the status of the assets held in a blind trust. These trusts are designed to prevent conflicts of interest and maintain privacy.

A blind trust is a type of living trust, either revocable or irrevocable, that grants full control of assets to the trustee. The trustee for a blind trust cannot be the trustor. The trustee must be a third party who doesn’t have a close, personal relationship to the trustor. This is necessary for a blind trust to serve its intended purposes: avoid conflicts of interest and achieve a high level of privacy.

The key difference between a blind trust and other types of living trusts is that neither the trustor nor his or her beneficiaries have the authority to manage any aspect of the trust or the assets held in it after the blind trust has been finalized.

The settler may dictate the parameters of the trust as it’s being drafted, including naming the beneficiaries and stipulating the goals for any investments held in the blind trust. But after the trust instrument – the written document that authorizes the trust – has been signed and completed, the trustor and beneficiaries have no more communication with the trustee regarding the handling of assets.

Persons having a strong interest in establishing a blind trust are politicians, board members of publicly traded corporations, lottery winners, investment advisors, and persons who wish to keep their identity secret as an investor in a regulated entity where a blind trust is permitted. State and federal laws govern blind trusts, so people who wish to establish one must enlist the help of an experienced lawyer.

Contact Our Claremont Estate Planning Lawyer Today!

Contact attorney Chris Scarcella, Esq., Certified Specialist in Trust, Estate Planning, and Probate by the State Bar of California, Board of Legal Specialization today to schedule an initial consultation.