A blind trust is a legal entity wherein the individual establishing the trust, the settlor, transfers assets to a trustee to manage without the settlor’s knowledge of how the assets are being managed. These trusts are typically used by politicians and executives who are concerned with conflict-of-interest issues. For executives, blind trusts have a number of additional practical uses. Blind trusts allow executives to decrease portfolio risk by diversifying their assets outside of company holdings. They also allow for professional management, a consistent income stream, and are not subject to probate. Used properly, blind trusts aid those seeking to avoid conflicts-of-interest while offering significant value.
See Kathryn E. Szewczyk & Christopher G. Mehne, Shedding Light On Blind Trusts, Financial Advisor, June 22, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
