Blind trusts are another type of trust that is established in order to set assets aside and preserve them for a specific period of time, however the person establishing the trust has no control over the funds and thus does not receive access to them. Additionally, the individual also does not receive periodic reporting of the assets held in trust and their investments.
Blind trusts are a type of irrevocable trust, meaning that the beneficiary does not have any control over the administration or distribution of the trust or its terms. The person establishing the trust relinquishes his or her rights to make decisions and gives the trustees, those people who are now in charge of managing and handling the assets, full power to make decisions. The maker of the trust only has the power to establish the trust and to terminate it.
These types of trusts are commonly used for individuals who are taking political office and have previously established independent wealth that may pose a conflict of interest while they hold office. Blind trusts can be used for various reasons, but are used by political figures with independent wealth in order to separate any interests that may conflict between previous business dealings or ownership and their current title of holding government office. Depending on the type of office held, the trustees of the blind trust would also have to be approved by a specific regulatory office.
The President Elect & His Blind Trust
Donald Trump, the well known billionaire business man who is now our president elect, has repeatedly stated throughout his campaign and since his nomination, that he would transfer his businesses and assets into a blind trust, in order to prevent any conflicts of interest while he is in office. However, there have been several questions raised about how much involvement he will still have with his companies while the blind trust is in place, after he named his children as his predecessors to the Trump fortune.
Mr. Trump’s three adult children will take over the Trump dynasty while he serves as President, which will then put them in a position to be trustees over the blind trust or to chose who will be in charge of the regulatory decision making for the companies, holding these businesses outside of Trump’s reach. While it has not been confirmed whether the children will serve in a political capacity, the potential for conflict becomes even greater if this is in fact a possibility.