trust created to avoid appearance of conflict of interest by an individual whose job involves a conflict with investing. Money in the trust is put in the hands of a trustee, who may not divulge the portfolio to the donor because knowledge of the holdings would compromise the independence and integrity of job performance. The party named as trustee can be a bank trust department or any third party, other than a relative, employee, or business partner, who is independent of the donor in name and in reality.
trust where assets are not disclosed to their owner. This prevents the underlying asset owner, while in an official public capacity, from being charged with favoring companies in which he owns stock.
trust in which a fiduciary third party, such as a bank or money management firm, is given complete discretion to make investments on behalf of the trust beneficiaries. The trust is called blind because the beneficiary is not informed about the holdings of the trust. Blind trusts often are set up when there is a potential conflict of interest involving the beneficiary and the investments held in the trust. For example, a politician may be required to place his assets in a blind trust so that his votes are not influenced by his trust's portfolio holdings.
