The elements of the blind trust are as follows:
The Trust Deed
The Trust Deed can be specific or broadly written, and the Trustees are legally bound by The Deed and obligated to operate within its stated objectives.
Nominee Settlor and Settlor
The Blind Trust is established by a Nominee Settlor, which is a Valmet company, and the actual Settlor settles the assets.
The Named Beneficiary in the Trust Deed is a charity of The Settlor's choice which receives a nominal sum each year. The actual beneficiaries are only stated in The Letter of Wishes.
Letter of Wishes
The Letter of Wishes can be altered at any time during the Settlor's lifetime and is written as a request to the trustees as to how the assets of the trust are to be dealt with. In this letter the Settlor will state how he would like the assets managed and distributed, both the income arising and the capital. In effect, The Letter of Wishes deals with the asset distribution in a similar manner as that in a will. Generally, the Settlor will be the first beneficiary during his lifetime, either alone or jointly with his spouse. On the first death, the survivor might become the beneficiary and thereafter the children. The last Letter of Wishes written before the Settlor's death prevails.
The Trustees would normally be Valmet's Trust Company in Gibraltar. The Trustees are appointed and dismissed by the Protector.
The Protector holds the power in The Trust Deed to appoint and dismiss the Trustees. In Valmet's structure, Valmet Trustees Limited of Montreal (Canada) normally acts as The Protector. The Settlor however can choose a person close to him and his family to hold the power of the Protector to veto actions of the trustees, to advise the trustees and to replace the trustees.
The Power to Appoint the Protector
Valmet Trustees and Consultants Inc, Valmet's Swiss fiduciary company holds the power in the Trust Deed to Appoint The Protector. The Settlor however can again choose a person close to him and his family to hold this power to appoint The Protector.
The Blind Trust can hold assets directly but normally will own one or more zero tax holding companies which hold the assets on behalf of The Blind Trust
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.