Some people in New York might want to set up trusts but do not understand the different types. One of these types is a blind trust, which is designed to conceal its assets and how they are being invested or managed from the beneficiaries of the trust. Rather, a trustee makes all the decisions regarding how the assets are invested.
Politicians often use blind trusts because they eliminate any connection between themselves and the control of the assets to avoid possible conflicts of interest. For instance, an individual may acquire a large estate worth millions of dollars by running a private equity firm. If the individual decides to enter government service, the estate could be transferred into a blind trust and a third party appointed as the trustee. Doing so prevents the individual from being swayed on certain matters because of the investments in the trust.
In this example, the settlor is the beneficiary. However, the beneficiaries and trustees of blind trusts can be whomever the settlors want to receive the proceeds and control the assets, respectively. From this perspective, blind trusts are no different than other trusts. The difference, though, is the degree of discretion that the trustees undertake.
Basically, blind trusts allow the settlors to avoid accusations that their personal finances are a conflict of interest in their political decisions. Due to this, these trusts are not used very often to hide people's assets from creditors or for any tax implications. However, they can be vital for allowing some individuals to keep their personal and public lives from conflicting with each other.
Those who are unsure about whether blind trusts are the best fit for their needs could consult estate planning lawyers first. Legal counsel might be able to answer all of their questions and make suggestions to help the individuals make informed decisions.