Blind Trust in a Will: What It Means in English Law

You may have heard the phrase “blind trust” in the context of politicians or celebrities who hand over control of their investments to avoid conflicts of interest. But what does a blind trust actually mean in the context of an English will — and is it a useful tool for ordinary estate planning?

This guide explains the concept, its legal position under English law, how it differs from a standard discretionary trust, the privacy advantages, and when — if ever — it makes practical sense.

What is a blind trust?

In its classic form, a blind trust is an arrangement where the beneficiary (or the person who created the trust) has no knowledge of — and no control over — the specific assets held in the trust. A professional trustee manages and invests those assets entirely independently, without consulting or informing the beneficiary about individual holdings.

The “blindness” refers to the beneficiary’s lack of visibility into the portfolio. They know a trust exists and that they will benefit from it, but they cannot direct specific investment decisions or know precisely which shares, properties, or other assets are held at any given time.

In the United States, formal blind trusts are common for public officials. The rules are codified, and the Office of Government Ethics supervises them. English law has no equivalent statutory framework.

Does English law formally recognise blind trusts?

English law does not have a separate legal category called a “blind trust”. There is no statute, no Land Registry form, and no HMRC code that uses the term. What English law does recognise fully is a discretionary trust with wide investment powers given to independent professional trustees — which achieves substantially the same practical effect.

When solicitors or accountants in the UK describe a “blind trust”, they typically mean one of two things:

1. A discretionary trust under the Trustee Act 2000 where the trustees have full investment discretion and are not obliged to consult the beneficiary on specific decisions.
2. A bare trust or nominee arrangement where assets are held by a nominee, with the beneficial owner’s identity concealed from third parties — though this does not conceal the assets from the beneficial owner themselves.

Neither arrangement is a true blind trust in the US political sense, but both can provide meaningful separation between the beneficiary and the day-to-day management of assets.

Blind trust vs discretionary trust: key differences

Can you create a blind trust in your English will?

Yes, in substance. You can draft a will that creates a discretionary trust with:

• Independent professional trustees (e.g. a trust corporation or solicitor firm).
• Full investment discretion under the Trustee Act 2000, widened further if you wish.
• A letter of wishes giving the trustees guidance on how to manage assets without binding them.
• A prohibition on the trustees consulting specific beneficiaries before investment decisions, if you want to approximate the blind trust concept.

However, one important caveat applies: under English trust law, an adult beneficiary who is absolutely entitled to trust capital has the right — under the rule in Saunders v Vautier (1841) — to call for the trust assets to be transferred to them. A discretionary beneficiary does not have this right until they meet the trustees’ conditions or the trust ends. So a discretionary trust with multiple potential beneficiaries can maintain a high degree of separation between any individual and the underlying assets.

Additionally, beneficiaries of a trust generally have a right to information about the trust under English law (see Schmidt v Rosewood Trust Ltd [2003] UKPC 26 and the rule in Armitage v Nurse). A trustee may withhold some documents (e.g. trustee reasoning letters) but cannot wholly deny a beneficiary knowledge that a trust exists or that they are a beneficiary. This is a meaningful limit on the “blind” element in English law.

Privacy advantages

A discretionary trust created by will does offer real privacy benefits, even if it falls short of a US-style blind trust:

• No public register of beneficial interests. Unlike shares in a private company (which may appear on the PSC register), the beneficial interest under a discretionary trust is not publicly registered.
• Probate privacy limitation. The will itself becomes a public document once probate is granted. However, it need not name specific assets — a well-drafted will can simply say “my residuary estate on discretionary trust” without listing every holding.
• Separation from personal creditors. Assets held on a discretionary trust are generally outside the reach of a beneficiary’s creditors (unless the trust was set up to defraud creditors, which is void under the Insolvency Act 1986).
• Flexibility. Trustees can respond to changing circumstances — tax law changes, family events, beneficiary needs — without needing to revisit the will.

Tax considerations

A discretionary trust set up by will is a “relevant property trust” for inheritance tax purposes. This means:

• An immediate charge of up to 6% applies when assets enter the trust on death, to the extent they exceed the available nil-rate band.
• Periodic (10-year anniversary) charges of up to 6% apply on the value above the nil-rate band.
• Exit charges apply when assets leave the trust (e.g. are appointed out to a beneficiary).

These charges do not apply to interest-in-possession trusts, which give a named beneficiary an immediate right to income — but those trusts cannot replicate the blind trust concept because one beneficiary has a fixed entitlement.

When does a blind-trust-style arrangement make sense in England & Wales?

• High-profile or politically exposed individuals who want to avoid any suggestion that a beneficiary is influencing asset decisions in ways that create conflicts of interest.
• Business owners who hold shares in an operating company and want to protect the business from interference by family members who inherit the shares.
• Beneficiaries with vulnerability to undue influence — removing their visibility of specific assets can reduce the risk of exploitation.
• Complex international estates where privacy from foreign tax authorities or litigation claimants is a genuine concern (subject to automatic exchange of information rules under CRS/FATCA).

For the vast majority of people making a straightforward will, a standard discretionary trust or a simple nil-rate band discretionary trust will achieve their goals without the complexity of trying to replicate the blind trust model.

Summary

• A blind trust has no separate legal status under English or Welsh law; the concept is primarily a US political and financial instrument.
• The nearest English equivalent is a discretionary trust with independent professional trustees and wide investment discretion.
• English trust law gives beneficiaries certain information rights that limit how “blind” any arrangement can truly be.
• Discretionary trusts created by will are subject to relevant property IHT charges at entry, on 10-year anniversaries, and on exit.
• For most families, a standard discretionary trust or protective property trust is the appropriate tool, not a blind trust structure.