How Does a Blind Trust Work for Lottery Winners?
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Function of a Trust
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A blind trust was originally established to allow an executor to handle funds while beneficiaries remained confidential. This idea might appeal to a lottery winner who wants to avoid the media attention and estrangement from friends and family. There are many stories of lottery winners being bombarded with "new" relatives appearing and asking for money, friends with requests and even lawsuits brought by those who "believe" that the ticket should be shared. A way to avoid this is to set up a blind trust. The attorney goes to redeem the ticket, without revealing the name of the ticket recipient. You remain unanimous and newly rich. No one is the wiser.
Benefits to the Lottery Winner
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A trust works well for a lottery winner. She appoints an attorney as executor when the trust is set up. As a beneficiary, the winner's name is not disclosed to the public. The trust also works as a financial tool to help lottery winners. With the help of financial advisers, the executor manages the winnings on the beneficiary's behalf. He ensures that the money is properly invested, so that the beneficiary will receive maximum benefit from the winnings. Not knowing the details allows the beneficiary an advantage in keeping the winnings confidential.
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Drawbacks to a Blind Trust
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For many people, the most unappealing aspect of the blind trust is giving complete control to the attorney. However, the trusts are created through an agreement between the executor and the beneficiary. You can outline what things the executor is allowed to do with the funds. You can also revoke a blind trust at any time, if you add this provision into your agreement in the beginning.
Keeping Confidentiality
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A blind trust is the only way that the lottery winner can have anonymity when claiming his winnings. Some states have open document laws that force lawyers to reveal the beneficiaries in a blind trust. However, your attorney can inform you in the event that this happens. Some states with such laws will only reveal beneficiaries if the requester has a viable reason for knowing the information. Thus, the state lottery officials may be the only person to see your name.
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References
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Comments
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I wonder those the state of texas allow this for jackpot winners where they're remaining confidential?
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This is great and helpful information...i was always apprehensive about how I would go about claiming my $$ without the onslaught of folks with there hands out! thanks for this info!
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This blind trust thing to maintain anonymity isn't an option in most places. Here in Canada it's not an option.
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I knew this could be done,
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I was just about to say the same thing.
