BIC videos and documents reference Blind Trusts as trusts successfully employed by wealthy politicians to keep their wealth details private. Could you compare and contrast the Blind Trust and the NLT please?
According to Investopedia, “A blind trust is a trust established by the owner (or trustor) giving another party (the trustee) full control of the trust. The trustee has full discretion over the assets and investments while being charged with managing the assets and any income generated in the trust.” So far, that matches the NLT.
Blind trusts create a layer of separation between the grantor’s assets and professional or political activities that helps to eliminate real or perceived conflicts of interest and accusations of wrongdoing. Individuals who receive a windfall can also use them to maintain financial privacy. Some advantages include that they can help avoid conflicts of interest and prevent family members from being unduly influenced by the grantor’s wealth. Some disadvantages include that the grantor may need more control over the assets, and the trustee may make decisions that the grantor disagrees with.
This can be solved with the NLT by appointing a nominee grantor and allowing the creator of the trust, the one who puts assets into it, be the managing trustee. In fact, that is what we encourage for most clients.
Traditional blind trusts are called that because the grantor gives his assets to a trustee and may or may not be able to see all that the trustee is doing with the assets. He is only trusting that the trustee is growing the assets for the best advantage of the beneficiaries. But in the case of the bequeathing party becoming the managing trustee, and appointing a nominee grantor, the advantages of the blind trust remain without the disadvantages, because the identity of the trustee of the trust is not disclosed to the public.