This is a great topic and I'm suprised it didn't get more posts. I've been studying Lotteries for about a year now and here's what I've been able to gather about Blind Trusts:
First there is not a lot of information on the web available about Blind Trusts. Many sites will mention the different types of trusts but say nothng about how to set up a Blind Trust.
From what I can gather Blind Trusts were conceived and set up so that the beneficiary of the trust has absolutely no idea where the money is invested and absolutely no control over how the money is invested. (Hence the first meaning of the word Blind.) Control of funds is given to the administrator (Trustee) of the trust who has complete (and presumably arbitrary) control over the investments and is prohibited (by law?) from disclosing that information to the beneficiary. The administrator (Trustee) has a legal and fiduciary duty to invest the funds in the beneficiary's best interest and is obligated to provide a report that details the balance but not the distribution of the funds.
A Trust is a public entity and whenever one is formed that information it is a matter of public record. (Just like the formation of Corporations and Companies.) The grantor...beneficiary...and Trustee of a Trust are all named and all listed in the legal documents. What makes a Blind Trust so attractive to Lottery Winners is that when a Blind Trust is formed only the name of the Trustee is listed in pulic records and the beneficiary (and grantor?) is shielded from public view. Nobody knows who they are. (Hence the second meaning of the word Blind.)
So...if a lottery winner forms a Blind Trust to collect his/her winnings they are guranteed anonymity. They are both the grantor and the beneficiary of the trust but only the trustee's name appears in the public record. However, by doing this they give up all control over how the money is invested. Those decisions are made by the trustee...who again has a legal and fiduciary responsibility to invest the money in the beneficiary's best interest.
From what I can gather some states have specific laws that prohibit lottery winnings from being collected as a Blind Trust. Other states...most notably Ohio permit it.
I'd like to know more about Blind Trusts because it seems to me the only sure way (in states that don't allow lottery winners to remain anonymous) to remain anonymous. But the concept of a Blind Trust does worry me. I can't imagine winning X million dollars and then giving up complete control of it by turning it over to someone to manage for me.
NOTE: I'm not a lawyer and the information I presented is based on my reading and my understanding of the information I've come across. (As I've freely conceded elsewhere...I'm not an expert.) The best thing to do would be to consult a lawyer in your particular state for precise and accurate information as Trust laws vary from state to state. But if I ever win you can rest assured that a Blind Trust will absolutely be one of the options I look at.
Jim