Setting Up A Blind Trust

Setting up a revocable blind trust gives you the flexibility to switch trustees in the future or even add or remove a beneficiary. If you re a lottery winner you might want a trust that puts 10 000 in your bank account on the first of every month. For example if you purchased your winning ticket with a group of office mates as long as everyone is in agreement you can set up a blind trust with all the winners as beneficiaries.

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To avoid conflicts of interest when a prominent business person ends up running for public office.

Setting up a blind trust. How to set up a blind trust. How to set up a tax id number for a trust account people including judges politicians and business executives use blind trusts to avoid conflicts of interest because in a blind trust the beneficiary does not know how the trustee handles the assets of the trust. First setting up the trust usually means paying the blind trust attorney s fees which could be substantial since this type of trust tends to be more complex than other trust options.

Gather the documentation for the assets that you want put into the blind trust. Draw up a trust agreement detailing how your blind trust will operate. A blind trust must meet your state s trust code so research the code before setting up the trust.

Whether the trustor would set up a revocable or irrevocable trust depends on the. A blind trust can also be an irrevocable trust which means nothing can be changed once it has been established. An irrevocable blind trust is also the best way to maintain fairness and harmony among multiple winners.

In the case of public officials they may want to remove themselves from some of their investments that might raise a public eyebrow or create a conflict of interest. Make sure you check local laws before you set up your blind trust. States establish the laws governing blind trusts so the exact steps and requirements will vary depending on which state you live in.

Another type of trust is an irrevocable trust. In general though the steps to set up a blind trust are as follows. The most common use for a blind trust is the one described above.

Although anyone can set up a blind trust politicians and lottery winners typically use them albeit for different reasons. To avoid potential conflicts of interest a federal official might set up a blind trust to manage private assets that he or she and his her spouse and dependent children own. How a blind trust works.

Beyond that there are ongoing costs associated with maintaining a trust including the administrative fee paid to the trustee for their services.

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