Blind Investment Trusts
when men and women are elected to public office, they must place
their investments into a "Blind Investment" Trust. This
is to prevent them from using the powers of their political office
to influence the performance of their investments. The investments
and property still belong to them, but while they are in office
an appointed Trustee manages the property for them. When their term
of office expires, or they retire or leave office for any reason,
the assets and full control over them returns to the individual.
power of a Trustee to manage investments is found in the Uniform
Probate Code in Sec. 16223-16226. One does not have to be a politician
to utilize one of these trusts. Stock brokerage accounts are often
in the form of a trust where the stock broker, as Trustee, has descretionary
powers to buy, sell and manage an investment portfolio.
with investment capital can set up such a trust and appoint a trustee
to manage their investments. Usually, the Trustee is a specialist
with particular knowledge about certain investments.
use a trust? One reason is accountability. Trust laws have the highest
standards of fiscal accountability to be found in any U.S. legal
code. Secondly, the activities of a Trustee can be bonded through
a fiduciary bond. If the Trustee acts less than responsibly, the
bonding company will cover any losses. The Trustee's fidelity is
insured. A third reason is professional convenience. A professional
Trustee is handling one's investment strategy with time, ability,
and business expertise. Finally, a Trustee can use the services
of professional funds managers, who are well acquainted with trusts,
to get superior returns for investors.
the beneficiary of the trust is someone other than the investor,
the Trustee can have certain powers and authorities over distributions.
For example, if a trust beneficiary has a history of substance abuse,
the Trustee may be empowered to withhold distributions until that
beneficiary has proven that they are "clean and sober."
Hatcher & Associates does not sell investments, we have provided
Blind Investment Trusts through a law firm in Los Angeles which
has managed investments which have paid Trustors a monthly income
stream of 2% (24% per year). This is not guaranteed, but is a "best
effort based on past performances." Since the investments are
held in a trust, the trust is closely supervised by the State Bar
and the IRS for the protection of the Trustors.
this particular case, these trusts run for 13 months. A Trustor
may either renew the trust for another term or have their principal
returned to them. They tend to perform better than insurance company
annuities for income distribution and trustors using them do not
face losses from surrender charges nor are they involved in long
term committments. The Trustee uses the investment services of SEC
licensed funds managers who utilize a number of investment scenarios.
The risk element is generally less than that of a mutual fund.