What is a blind trust?

A blind trust is a trust that is aimed at preventing conflicts of interest arising. Usually, the settlor and beneficiary of the trust is a politician or someone holding a similar public position.

The settlor/beneficiary (SB) transfers assets to trustees to hold absolutely, who then manage those assets and invest them in such way as they think fit without the trustees taking any direction from SB as to how the assets are bought, sold, managed or invested and without the trustees telling SB how the assets are bought, sold, managed or invested. This is intended to prevent SB from being criticised on the grounds of there being a conflict of interest if SB, in their official role, makes a governmental decision which has an impact on the value of the investment held in the trust. The idea is that SB should take decisions without being influenced by the potential effect of the decision on their own asset portfolio.

A blind trust, therefore, requires that the trustees should have complete freedom