|Posted: November 26, 2012, 2:33 am - IP Logged|
I read several posts with what seems to be misinformation about blind trusts and Powerball winnings. It seems confusing because the intended purpose of the blind trust to to set it up for a beneficiary and then keep that beneficiary in the dark about how the money is invested etc. For lottery winners, the advantage is anonynimity in some states. But what good is being anonymous if you give control of the money to the executor? How can you be sure they won't steal it or invest it in their brother's band? It's in how you write the blind trust.
First you secure a lawyer and write the trust together. With your lawyer's help, you will include provisions to protect your interests, such as requiring that the money cannot be invested in anything, or spent on anything, but must be paid to your beneficiary (like your kid) on your death, or disbursed in its entirety into an account of your choosing in X number of days (for example), whichever comes first. You make the rules! That's part of the beauty of a trust. The executor has to abide by the rules. (Be sure to consider tax implications in the type of trust and where you set it up so the money is not double taxed!)
A blind trust does not mean the money must be invested, even if that is the general intention of such legal entities. You get to name the trust. Make the name fun, and protective, like "the 5 day lottery trust that cannot be spent by my attorney or the executor." You will decree in the trust that any lottery claims cannot be disbursed to any financial account other than the one you setup at the bank. Of course, you will make the trust revocable at any time, but you would not usually want to revoke it because then the money goes to the trustee, which might be OK under some circumstances with additional provisions but would not be reccommended in my opinion (the trustee might be "you" in your state but that depends on the legal waters you are treading).
Then you take the trust agreement you drew up with your lawyer to a couple other lawyers to be sure it is legal, bulletproof, and 100% binding without loopholes (in your state) before you sign it. The added benefit, more actionable targets if anything goes wrong. It goes without saying that the original lawyer who will be assisting you in claiming the funds on behalf of your trust will be a rich attorney in a wealthy successful practice so they will have everything to lose if anything happens. (In my opinion, the guy down the street with a sign that says "LAWYER" is not always what you want.)
Then comes the result of all your efforts, the trust gets the money, it cannot be touched, and it reverts to you in accordance with the provisions of the trust. You have the money and nobody knows who you are...unless your state has some wacky rule that blind trusts are open documents. In such a case, you would establish the trust in a state where the trust papers are private, and your out-of-state-trust would claim the winnings in the state the ticket was purchased in.
You cannot move to a state that keeps your identity private and expect that to be enough to protect your identity because you have to claim lottery winnings in the state the ticket was sold in.
Other ideas for anonymity? Even if the state the ticket was sold in requires the identity and forbids trusts, you may be able to establish a new name (legally), claim the ticket, and change your name back, but the media may find you eventually. In such a case, a compelling reason might also sway the lottery officials to bend the rules, like a mental illness issue or a stalker you are hiding from (maybe hint that if anythign happens to you they may be liable). Be creative! Get that restraining order against your Aunt Millie first.
If you absolutely had to claim the funds, you may be able to wear a disguise when you collect the funds...that would be smart.
One would want to notify the lottery in the winning state that it will be claimed by a blind trust before anyone shows up to avoid anyone finding out who you are.
This is not legal advice and should not take the place of the advice of an attorney.
Have a nice day.