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We are about 20 families with common background and roots living in Massachusetts, closely related. We organize a reunion once a year. We also try to help each other financially when we can. To organize the reunion usually some of us pay the costs up front and then get refunded much later by the families. Also, sometime if a family has an emergency (like a death or health problem), we scramble for a few days to collect money to help.

What we would like to do is ideally have a bank account, under no specific person's name, to which every family deposits automatically each month a small sum of money (say $40). This way, we have money ready to use to organize the reunion, or pay for emergency events.

My question is how do we go about doing this? Do we need to create some sort of organization in order to create the money account? is there anything in the financial/banking tailored for this situation already?

Thanks

  • If there were a lot more money involved, some kind of Trust might make sense - but the lawyers' fees would quickly consume the amounts described. – AakashM Mar 26 at 13:43
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    I assume you don't actually need the account to be anonymous, just not attached to any one person. – DJClayworth Mar 26 at 15:52
  • @DJClayworth yes, that's correct! – sOltan Mar 29 at 1:29
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Assuming you don't actually need the account to be anonymous, this is fairly easy to do. It's just a joint account.

You need to pick a few people, maybe around three or four, who will manage the fund. You open a joint account in their names. They identify themselves to the bank and are responsible for the account. You tell the bank in advance what the account is for.

Paying in is easy. Knowing the account information anyone can transfer into it. Or they can send a check to one of the account holders, or make an e-transfer. The account holder then pays the money into the account.

To get money out you can decide how many people need to authorize a withdrawal. Most accounts need just one person, but you can set up accounts that need all signatories, or two out of three, or some other number. You make sure there are no cards for the account - withdrawal must be made by check. When someone needs money, two or three of the account holders write a check, or authorize a transfer.

  • This makes sense, and sounds like a reasonable way of doing this. The 3 or 4 people who step up to create the joint account would have been naturally picked by the others for their integrity and trustworthiness. This solution is worth researching more. With this joint account, the money that gets deposited is considered income, and they have to address that in their tax returns etc. no? – sOltan Mar 29 at 1:35
  • Also, I wonder about the what-if scenarios like, one of the holders gets in trouble and gov need to tap into their finances to pay debt, taxes etc. they may go after his/her share in this joint account, no? the more I think about this, the more I feel I should tell my community to forget about this. – sOltan Mar 29 at 1:44
  • I think you are worrying about an unlikely event. And if not then isn't someone "gets in trouble" exactly the sort of situation the fund would be intended for? – DJClayworth Mar 29 at 9:27
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You will run into multiple issues when trying to use a bank account:

  • the bank will require a social security number when setting up the account, or the equivalent for a corporation. Any interest earned will be assigned to that number

  • some banks will allow a small community organization, think scout troops, that don't have those numbers to set up accounts, that are a hybrid between a personal and a corporate account. They will allow more transactions because they know those community organizations have a large number of transactions while fundraising. They also keep fees to a minimum to avoid eating away their small budgets.

  • The bank may be concerned with more than a handful of people being able to transfer money into the account. They will certainly not want an account where a lot of people can transfer money out. You will have to limit the number of people that can pull money from the account.

  • you will have to watch the amount of money being funneled through an account to make sure they don't suspect money laundering.

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    Nice answer, well supported. Note: the small organizations are either charity (non-profit) or at least some type of corp/LLC, legal entity. – JTP - Apologise to Monica Mar 26 at 14:08
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There is a lot here to address. There is no legal way to store money, aside from physical cash, in the way that you describe. No bank is going to accept money into an anonymous account. Someone needs to go there, sign paperwork, etc.

And there is no easier way to build resentment among friends and family vent to start getting involved in such an endeavor.

Understanding your goal and the good intentions that you have, I would suggest that you look at the mini online cash transfer services, such as PayPal, the "Cash App“, or Venmo. These services allow for a near instant transfer of money and would be suitable to your situation. It will also let one person privately send what they wish according to their own means, to help out the person in need.

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    I don't think the OP really wanted the account to be anonymous, just not belonging to one person. And I think part of the point is that people contribute regularly, not just when a crisis happens. – DJClayworth Mar 26 at 18:05
  • Yes, OP has clarified that they aren't after an anonymous account, just a non-personal account. – a CVn Mar 29 at 9:09

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