Blind trusts are a type of trust relationship between the donor or grantor and the trustee in which the grantor places funds, assets, and/or securities into a trust to be managed by a designated trustee and the grantor has little or no knowledge, involvement, or control over the trust. Blind trusts have been used to manage assets and investments for prominent political figures and high-profile investors in order to remove personal interests from the management and execution of the trust.

Blind trusts provide the grantor with an extra layer of assurance that his or her investments and assets are not affected by their current employment or political interests. With a blind trust, the grantor has complete confidence in the trustee to make decisions that will benefit the grantor in the long run.

Blind trusts are commonly established with a grantor’s financial advisor or a corporate trustee. The trust document must be carefully drafted with the grantor’s and trustee’s individual goals in mind. The trust agreement outlines the fiduciary duties of the trustee and the administrative procedures and procedures for managing the trust’s assets. Additionally, the trust document outlines the grantor’s expectations in terms of investment choices and performance.

The primary benefit of establishing a blind trust is the potential to eliminate any conflicts of interest. For example, elected political officials or business executives may find that their investments may pose a threat to their current employment or political interests. By establishing a blind trust, the grantor can rest assured that any investments made on his or her behalf are not subject to undue influence from his or her employer or political interests. Additionally, blind trusts provide privacy; investments and holdings are often kept from the public, as the trust is not subject to greater public scrutiny.

In the majority of states, a blind trust must include the name of the trustee and the address of the trust in the agreement. Blind trusts must also remain active and in effect until the trustee is no longer able to continue to act as trustee. When the trustee is no longer able to perform the duties of a trustee, he or she must appoint a new trustee and provide a copy of the trust document to the new trustee. Additionally, the trustee must provide an inventory of the trust's assets to the grantor on an annual basis.

Overall, a blind trust can provide a safe and secure way to manage investments while providing assurance that personal interests are not interfering with the trust. A blind trust is often a good option for those seeking to avoid conflicts of interest and maintain privacy with their investments.