Blind trust

Question

This is a political question, cleverly posed as an English usage question. (I am very clever. My parents told me so.)

I was reading that before Bernard Baruch went into government service, he liquidated his holdings and sold his seat on the NYSTock Exchange. This one source doesn't make clear if he did this to raise money to buy liberty bonds, which he did, or if it was mostly to make himself financially neutral on the advice he gave the President.

But it seems to me that liquidating one's investments is the right way to do it.
Nowadays they just put things in a blind trust, but does that imply that everything is sold and other things bought? Or is most of the trust the same stocks that were put into the trust when it was created? If the trustee is to maximise profits, should he be selling things that are expected to do well? If the job of the trustee is less to maximise profits and more to totally hide from the beneficiary what is in the trust, why is this never mentioned?

The definition below talks only about management and the right to information, not about making certain what was once true is no longer true.
blind trust
n.
A financial arrangement in which a person, such as a high-ranking elected official, avoids possible conflict of interest by relegating his or her financial affairs to a fiduciary who has sole discretion as to their management. The person choosing the trust also gives up the right to information regarding the status of the assets.
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Source: The American HeritageÂ® Dictionary of the English Language, Fourth Edition
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[nq:1]This is a political question, cleverly posed as an English usage question. (I am very clever. My parents told me ... maximise profits and more to totally hide from the beneficiary what is in the trust, why is this never mentioned?[/nq]
There is a variety of "blind trust" established for tax purposes of course by one or more persons for their own benefit or the benefit of others. This is a complicated legal thing, but those willing to wade through some fairly dense prose can find more about it at
. (The "Jersey" in that URL is in the UK, not the US.) I don't think the political-official "blind trust" is related to this one.

The United States has an Office of Government Ethics (which is headed by a Director, who in his spare time rules Venice), and that office has issue a standard form blind trust that is mandatory for federal political appointees above a certain level (subject to exceptions granted upon application). It can be found at or . It does not require the trustee to sell off the property placed in the trust at its beginning.

I assume that at least some individual states of the US, and perhaps jurisdictions elsewhere, have a similar practice of using blind trusts. I don't know how those other trusts treat assets placed in the trust at the beginning. If you assume that the trustee really does have total discretion to retain or sell any asset, it ought to be the case that the beneficiary cannot know what is in the trust from day to day and therefore will not have any motive to favor any given company, so there is no need to dispose of the initial assets, so there is no need to require that such disposal occur.

Real life may be otherwise.

Bob Lieblich
Mildly cynical in his old age

Blind trust

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