Creation of trusts—blind trusts
Produced in partnership with Michael O’Sullivan of 5 Stone Buildings
Creation of trusts—blind trusts

The following Private Client practice note Produced in partnership with Michael O’Sullivan of 5 Stone Buildings provides comprehensive and up to date legal information covering:

  • Creation of trusts—blind trusts
  • What is a blind trust?
  • Other types of Blind Trust

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 and discretion as to how assets are bought, sold, managed or invested and that they should be under no obligation to take orders from, consult with or even inform SB.

A blind trust will usually be a bare trust in terms of

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