A blind trust is a trust where the owner gives another party full control of the trust. The trustee has discretion over the assets and investments in the trust. Blind trusts are often used to avoid conflicts of interest between employment and investments. In a blind trust, the beneficiaries and trustor have no knowledge of the investment holdings. Blind trusts can be revocable or irrevocable, depending on the situation.
Benefits of blind trusts include objective decision-making, privacy, and asset protection. However, blind trusts also have drawbacks such as limitations in completely eliminating conflicts of interest and limiting the trustor's ability to actively manage their assets.
Blind trusts are commonly used by politicians and executives to prevent conflicts of interest. They are also used in estate planning to protect assets and maintain privacy. Lottery winners may create blind trusts to keep their winnings private and maintain anonymity.
Blind trusts must adhere to specific regulations and requirements, depending on the jurisdiction. For example, blind trust operation in Florida requires approval from the Senate Select Committee on Ethics.
Overall, blind trusts are a valuable tool for individuals who want to separate their personal financial interests from their public or professional roles.
