Trusts are used for many purposes, including not only estate planning but also management of wealth during one’s lifetime. One particular type of trust, known as a “blind trust,” has the very specific goal of combating the appearance of a conflict of interest that might otherwise be present in a particular situation, such as when an elected official holds substantial wealth in the private sector. If you have questions about a blind trust or think you may be ready to set up such an arrangement, Nashville estate planning lawyer Randy Ratliff can help. In addition to a wide variety of trust documents, he drafts other estate planning tools such as last will and testaments, durable powers of attorney for healthcare, and living wills.
In legal matters, the term “trust” simply refers to a fiduciary relationship in which a trustor places assets into the hands of a trustee for the benefit of one or more beneficiaries. Trusts may be included in a will; when this happens, the trust is said to be “testamentary” in nature. Trusts that go into effect during the trustor’s lifetime are called “inter vivos” or “living” trusts. Because of their purpose in avoiding conflicts of interest, blind trusts are typically considered to be living trusts, rather than testamentary trusts. Some of the key components of a blind trust include an independent trustee who is not subject to influence by the trustor, “transferable” assets that can be sold, transferred, or traded without the trustor’s knowledge or consent, required provisions that the trustor is prevented from communicating with the trustee about financial matters, and, sometimes, approval of the trust (and the trustee) by governmental ethics authorities.Who Can Benefit From a Blind Trust?
Elected officials who hold investments or business interests that may be affected through government action may wish to consider a blind trust. There may be state or federal rules in place that govern certain aspects of a blind trust created by an elected official or other government employee in order to avoid a perception of impropriety. It is important that these regulations be carefully followed in order that accusations of self-dealing are not made. In some situations, a high ranking business executive might also establish a blind trust in order to prevent concerns about possible insider trading and the like.
In some blind trust situations, the trustor’s assets must first be liquidated before the proceeds therefrom may become part of the trust. The trustor must be chosen carefully, as ethics concerns, rules, and regulations may be very specific as to who may and may not serve in this position. Once the trust is established, the trustor becomes “blind” to how his or her assets are being managed, thereby preventing an accusation that he or she has used his or her position to increase his or her wealth in some manner. Depending upon the particular situation, the beneficiary of the trust may be the same person as the trustor or it may be his or her spouse or minor child.Contact a Nashville Attorney With Your Estate Planning Questions
If you are interested in learning more about blind trusts, an experienced estate planning lawyer can talk over your particular situation with you. At the Randy Ratliff Law Offices, PLLC, we help Davidson and Williamson County residents, including those in Antioch, Madison, Goodlettsville, Hermitage, Franklin, Brentwood, Joelton, Nashville, and Cool Springs, with many different types of trusts and other estate planning documents. To schedule an appointment, call us at 615-656-8282 or contact us online. We also provide legal advice concerning elder law and family law cases. Please rest assured that we will make every effort to insure the confidentiality and privacy of any matters discussed in our offices. While talking to an attorney about trusts, estates planning, and other matters can be daunting, the alternative – including the possibility of protracted litigation in some instances – is far less appealing for most individuals.