What is a Blind Trust?
A blind trust is a particular type of trust in which the executor or other kind of responsible fiduciary third party is empowered to administer the business of the trust without any input from the beneficiary. Along with granting full management discretion, the blind trust also prevents the administrator from providing any information about the day to day operations of the trust to the beneficiary. Blind trusts can be very helpful when an individual wishes to avoid any conflict of interest as a result of business assets. By transferring the assets in question into a blind trust and granting control of the assets to the executor or an administrator through a power of attorney, it is possible to draw a clear line between current holdings and efforts to acquire additional business interests. Since the administrator is not at liberty to discuss the management of any assets within the blind trust with the owner, there is no chance of being able to make use of the assets in order to secure a
The thorny issue of blind trusts has raised its head again in the latest round of questions in the Blair flats row – but what are these trusts and what do they do? On the face of it ‘blind trusts’ are meant to inspire confidence that leading government ministers are not going to make biased decisions based on their business interests. Blind trusts are devices which place the management of a person’s assets into the hands of other experts who decide how those funds are invested. Anybody taking out a blind trust is supposed to remain independent from the trustees and not influence their decisions in any way. Hence the owner of the assets is ‘blind’ to how his or her funds are managed and what assets are bought or sold. However, the owner of the trust can still collect interest and dividends. ‘No prejudice’ Ministers with substantial business interest have used blind trusts as a means of preventing any conflicts of interest with decisions they have to make as part of their duties of offic
