How to Make Financial Transactions as Anonymous (As Possible)
Privacy is hard to come by these days as much of your information is stored somewhere. Any time you make a purchase or send a payment, your transaction is recorded along with other data about you.
What if you don’t want everyone to know who you are and how you spend? Perhaps you want to donate to a charity, or buy medical supplies and wish to keep those transactions private.
There's no need to go off the grid and live in a cash-only world. It is possible to enjoy some privacy if you have the right accounts set up.
Desire for Privacy
There are several reasons that you might want to keep your accounts private.
For whatever reason, you might prefer to bank (more or less) anonymously. Perhaps you just won the lottery, and you’ve heard horror stories about winners getting hounded by long-lost acquaintances and con-artists.
Donations and payments
Along similar lines, you might want to give money away without the recipient knowing where it came from. You might also prefer to make payments without others seeing where you spend your money – whether you’re buying things for yourself or paying expenses for somebody else.
Keeping a low profile
If you have significant assets, you might not want to broadcast that fact – especially if it makes you a more attractive target for lawsuits. In a worst-case scenario, you might even find yourself in a kidnapping and ransom situation.
Perhaps you’re less concerned about your privacy and more concerned about somebody else’s. If you want your assets to pass to a person or organization without the whole world knowing about it (and avoid probate), you need to make arrangements ahead of time.
Keeping Assets and Payments Private
If you have significant assets, family offices—firms that manage the wealth of ultra-wealthy individual or families—might keep your assets and payments private with local connections and a discreet staff.
Outsourcing to an experienced firm requires the least amount of involvement on your part, but you’ll need to do some research to ensure that you’re working with trustworthy people.
Another approach is to create an entity that owns your assets. For example, a trust can hold assets like cash, automobiles, real estate, and business interests. Trusts can also make payments—without your name being directly linked to the payments.
Someone will know that you are linked to the entity, but you can choose who those people (or organizations) are. For example, a bank would need to know who you are if you want to make deposits and withdrawals using the entity's account.
In a more complex setup, you can select others (such as an attorney that you trust) to manage the entity and assets for you.
Once you hire representatives, those individuals won't be anonymous. For example, in a trust, the name of the fiduciary (the person designated to manage the account) will be on file at the Internal Revenue Service for the trust.
So, what kinds of entities can you use? Again, only an attorney familiar with your situation and state laws can tell you, but we can give you some food for thought.
Is Complete Anonymity Possible?
There are practical challenges to complete anonymity. If you buy something online, you have to provide a delivery address. Many businesses have their cashiers ask for your phone number and name—you may slip and give them the information.
Keeping your information private requires a continuous, conscious effort. It's not terribly difficult to keep your name out of the spotlight, but it's difficult to be invisible.
Superior Court of California. "Living Trusts." Accessed March 23, 2020.
U.S. Securities and Exchange Commission. "Family Office." Accessed March 23, 2020.
FindLaw. "How Do I Put Money and Other Assets in a Living Trust?" Accessed March 23, 2020.
LegalZoom. "How to Set Trust Checking Accounts." Accessed March 23, 2020.
Ally Bank."Take a Closer Look At Trusts." Accessed March 23, 2020.
Internal Revenue Service. "2019 Instructions for Form 1041 and Schedules A, B, G, J, and K-1," Pages 3-4. Accessed March 23, 2020.
Huntington National Bank. "How to Use a Debit Card: Online, ATM & Chip." Accessed March 23, 2020.