Blind Trust

Extracted Attributes

• Type

  Financial arrangement, Trust

• Creator Role

  Trustor (also known as Grantor, Settlor, Donor)

• Manager Role

  Trustee (Fiduciary)

• Legal Structure

  Can be revocable or irrevocable

• Primary Purpose

  Prevent conflicts of interest

• Secondary Purpose

  Ensure impartial decision-making, Provide financial privacy, Shield from public scrutiny

• Control over Assets

  Trustee has full discretion

• Estate Tax (Revocable Trust)

  Assets considered part of grantor's estate

• Beneficiary Knowledge/Control

  None over holdings or transactions

• Tax Liability (Revocable Trust)

  Grantor retains tax liability

Timeline

• Enactment of the Ethics in Government Act, which requires U.S. government officials to disclose financial assets unless they are transferred to a qualified blind trust. (Source: CNBC, Web Search)

  1978-01-01

Blind trust

A blind trust is a trust in which the beneficiaries have no knowledge of the holdings of the trust, and no right to intervene in their handling. In a blind trust, the trustees (fiduciaries, or those who have been given power of attorney) have full discretion over the assets. Blind trusts are generally used when a trust creator (sometimes called a settlor, trustor, grantor, or donor) wishes for the beneficiary to be unaware of the specific assets in the trust, such as to avoid conflict of interest between the beneficiary and the investments. Politicians, or others in sensitive positions (such as journalists and religious leaders) often place their personal assets (including investment income) into blind trusts, to avoid public scrutiny and accusations of conflicts of interest when they direct government funds to the private sector.

Web Search Results

• Understanding Blind Trust : What It Is & How It Works

  What is a blind trust? A blind trust is a special type of trust where the trustor (the person who sets up the trust) hands over control of their assets to a trustee (the person managing the trust) without knowing how the assets are managed. This setup is particularly useful for avoiding conflicts of interest, especially for politicians and business owners. In this guide, we’ll break down the concept of blind trusts, how they work, who needs them, and more. You’ll also find real-life examples [...] ## What Is a Blind Trust? A blind trust is a special type of trust where the trustor (the person who creates the trust) hands over control of their assets to a trustee (the person who manages the trust). The key point of a blind trust is that the trustor has no knowledge of how the trustee manages the assets. This setup helps avoid any conflicts of interest, especially for public figures or government officials. ### Basic Concept and Purpose of a Blind Trust [...] There are strong legal and ethical reasons for setting up a blind trust. First, it prevents conflicts of interest. When you do not know how your assets are being managed, you cannot make biased decisions. This is important for maintaining trust and fairness in public roles. Second, it provides financial privacy. Your trustee handles everything, so you are not constantly worried about your assets. This can be very relieving, especially if you have a busy job.

• Blind Trusts | Altruist Trust Co. & Fiduciary Services, Inc.

  A Blind Trust constitutes a specialized financial arrangement whereby an independent trustee manages your assets without your direct knowledge or involvement. This type of trust guarantees impartial decision-making, preserves confidentiality, and shields you from potential conflicts of interest. Essentially, it is an effective means of safeguarding your financial privacy while fulfilling professional or ethical duties. Corporate leaders, public officials, and high-profile individuals utilize [...] (blind trust) facilitates the transfer of such shares (and other assets) into a trust, where a qualified trustee holds exclusive authority to determine if and when to sell, rebalance, or reinvest these assets. Importantly, the insider has no awareness of the trust’s specific transactions and exerts no influence over the timing or selection of investments. This “hands-off” methodology permits insiders to attain diversification and mitigate risks gradually, without infringing securities [...] compliance tool and have facilitated numerous executives in systematically liquidating portions of their holdings to achieve diversification or liquidity objectives. Conversely, an EDIT (blind trust) can be utilized as an alternative to, or in conjunction with, a 10b5-1 Plan, providing distinct advantages for executives or other insiders. Within a blind trust arrangement, instead of adhering to a fixed trading schedule, an independent trustee (e.g., Altruist™) manages the sale of stock and the

• What Is a Blind Trust: Here is Everything you Need to Know - CNBC

  A blind trust is a type of living trust that separates an individual from key financial knowledge of their assets. The individual would assign their assets to a trustee who would then be in control of all of the decision-making processes regarding the assets. The individual can be involved with the conception process of the trust and help guide the creation, but once the documents have been signed, they are no longer involved in the handling of the assets. [...] A common use case of a blind trust is when an individual is elected to public office. The Ethics in Government Act of 1978 requires all government officials to disclose their financial assets unless they are transferred to a qualified blind trust. This is often utilized by public officials to avoid disclosing their personal assets as well as circumnavigating the high levels of public exposure that accompany the release of their information. [...] A blind trust is a rather unique concept for many people as it predominantly applies to politicians and government officials. That being said, it does have its uses outside of these more high-profile positions. The aim of a blind trust is to prevent any financial conflicts of interest from people who are expected and required to make objective decisions that may affect their personal financial well-being.

• What is a Blind Trust? Definition, Mechanics, and Real-World ...

  A blind trust is a trust established by the owner (or trustor) giving another party (the trustee) full control of the trust. The trustee has full discretion over the assets and investments while being charged with managing the assets and any income generated in the trust. The trustor can terminate the trust, but otherwise exercises no control over the actions taken within the trust and receives no reports from the trustees while the blind trust is in force. Blind trusts are often established in [...] A blind trust can be a revocable trust, meaning the trustor can make any changes to the trust, trustee, and terminate the trust. A blind trust can also be an irrevocable trust, which means nothing can be changed once it has been established. Whether the trustor would set up a revocable or irrevocable trust depends on the particular situation and goal of the trust. An irrevocable trust, for example, can be designed so that assets are no longer the legal property of the trustor and thus [...] Conversely, a blind trust is designed so that the trust beneficiaries and the trustor have no knowledge of the investment holdings within the trust. Neither party has any control or say in how the investments are managed, including whether to buy or sell specific securities.

• What Is a Blind Trust? Balancing Privacy & Compliance

  The worth of a blind trust is highly individual. It should be considered in light of one's professional obligations, personal preferences, financial goals, and the benefits and drawbacks it offers in one's unique situation. Consulting with legal and financial advisors to fully understand the implications, costs, and benefits is crucial before deciding whether a blind trust is the right choice for managing your assets. [...] Revocable Blind Trust: Generally, the grantor retains tax liability, meaning the income generated by the trust's assets is typically reported on the grantor's personal income tax return. The assets in a revocable trust are also considered part of the grantor's estate for estate tax purposes. [...] ## How Do Blind Trusts Work? Blind trusts are effective for maintaining impartiality and avoiding conflicts of interest, especially for individuals in high-profile or sensitive positions. They work by segregating knowledge and control of the assets between the trustee and the beneficiary, ensuring unbiased and ethical management of the assets in the best interests of the beneficiaries. To achieve this goal, three primary roles are involved: