A
blind trust
is a
trust
in which the
trust 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.
Use by US government officials to avoid conflicts of interest
edit
The US federal government recognizes the "qualified blind trust" (QBT), as defined by the
Ethics in Government Act
and related regulations.
[1]
In order for a blind trust to be a QBT, the trustee must not be affiliated with, associated with, related to, or subject to the control or influence of the government official.
[2]
Because the assets initially placed in the QBT are known to the government official (who is both creator and beneficiary of the trust), these assets continue to pose a potential conflict of interest until they have been sold (or reduced to a value less than $1,000). New assets purchased by the trustee will not be disclosed to the government official, so they will not pose a conflict.
[2]
British party funding
edit