A Brief Overview of Blind Trusts

A “blind trust” is like other trusts in that you place money or other assets in it and those assets are distributed to beneficiaries according to the trust agreement. What is different about this type of trust is that the trustee (the entity or person designated with administering the contents of the trust) has full discretion over the assets, and the recipients have no knowledge of the kind of assets or income in the trust.

The person who created the trust, the trustor, places their assets in the trust and may maintain the right to cancel the trust. Otherwise, however, he or she has no control over how the trust is managed or how income is distributed (other than what was already established in the trust document).

Unlike a typical trust, beneficiaries will also receive no reports from the trustee while the blind trust exists. That also means that the recipients will have no information or indication of how investments are performing.

Who Uses Blind Trusts?

In theory, anyone can use a blind trust. Perhaps parents do not want their children, as beneficiaries, to know how much money is in the trust or where the money originates. The most well-known use of a blind trust actually deals with political candidates or those already elected to public office.

Politicians will use blind trusts so that the public will not see where they have invested their money or how much money they have. The idea behind this type of use is to avoid any potential conflict of interest between their investments and their political viewpoints or role as a public officer. Florida is one of many states that permits politicians to use blind trusts for this purpose.

While some people assume that they can put lottery winnings in a blind trust in an effort to remain anonymous, that is not an option in Florida.

Disadvantages of Blind Trusts

Blind trusts serve a very unique purpose, which means that the disadvantages to this type of trust may outweigh the benefits. In Florida, a qualified blind trust, as they apply to public officers,  must meet particular qualifications, including:

  • No attempt to exercise control over any decisions regarding the trust
  • The trustee must be a bank or other institutional fiduciary, or, if it is an individual, it is limited to specific classifications of individuals (generally no family members)
  • No efforts to obtain information about the contents of the trust at any time
  • Communication with the trustee is substantially limited
  • No access to trust tax returns or other financial documents

Because of the limited information and control, a blind trust will only make sense in certain situations.

Contact Us

If you have an unusual estate planning concern regarding privacy and information, a blind trust may be just the creative solution you need. Call our office at 904-880-5554 to schedule an appointment or to get more information today!

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.