Is it legal if I'm managing my family's entire wealth?
I am not going to discuss legality, because with family members you are able to give a lot of guidance and assistance without running into legal issues.  The biggest problem is that when they transfer the funds to you and you invest the money, all the tax rates and tax limits are determined by your situation; plus you have more investments than you should have so you hit those limits and brackets quicker. For example: In the United states a person can put $5,500 or $6,500 into a IRA or Roth IRA each year. If you combine the funds for three with your funds then you are giving up three quarters of the amount that you can invest in that type of account. The decision regarding Roth or not depends on age and income level. But now their decision is related to what is best based on your situation. The ability to even deduct IRA deposits would be based on your situation. Of course for taxable accounts the tax rate is determined by your income, not theirs. If they want you to have the ability to make investment decisions for them, then power of attorney is the way to go. The money is deposited in their name, and all the rules and tax rates are determined by their situation. You make sure they have all the information they need to login and review the accounts, but you make the all the moves within and between accounts. "You are opening up a large can of worms with how you are doing this.  In very positive years, you'll have taxes based on your income, potential Alternative Minimum Tax (AMT), etc. Each of the family members may be in a lower bracket, perhaps even needing to pay zero on capital gains.  Even if you are 100% honest, if you are subject to a lawsuit, these funds are all in your name, and you'd be in a tough situation explaining to a court that these assets aren't ""really"" yours, but belong to family.  And last, the movement of large chunks of money needs to be accounted for, and can easily run afoul of gifting rules.  As mhoran stated, a Power of Attorney (POA) avoids this. When my father-in-law passed, I took over my mother-in-law's finances, via POA. I sign in to my brokerage account, and her accounts are there. I can trade, deal with her Individual Retirement Account (IRA) Required Minimum Distributions (RMDs) each year, and issue checks to her long term care facility. It's all under her social security number - our money isn't intermingled." "I agree that this is a ""bad idea"" but I want to add in one more reason. Let's pretend your family and you are ok with all the tax ramifications and legal issues. This is still a horrid idea.  You have to deal with the What Ifs. What if you get in an accident with your car, and then a law suit comes around and they decide to seize your assets? Again the reason isn't important—what is important is your ability to pay a critical ""thing"" is going to be based off accounts and money that are not yours.  So you goof up on child support and they ""freeze"" your accounts. Guess what? Now your family members lose access to their money, because on paper it's your money. Keep in mind it doesn't have to be an irresponsible action that causes the issue. ID theft, for example, often results in a temporary account freeze while things are sorted out. So now your mom can't eat because ""your money"" is pending review.  In this situation you might even turn to your mother or father or brother for help while your accounts are frozen for 2-3 months and everything is sorted out. But now you can't because their money is tied up too.  Lastly lets assume the ID theft issue. That ID thief now has access to a big pool of money. They walk off with everyone's nest eggs—not just yours." "This is the biggest blunder I see in money handling.  ""Oh I'm a good person and everyone knows my intentions are good.  And they're really happy with me right now, so it'll stay that way forever, right?  So I can just do anything and they'll trust me.""  And then in hindsight 10 years later, the person realizes ""wow, I was really stubborn and selfish to just assume that.  No wonder it blew up.""  Anyway, to that end, your requirement that all the money be in one account and ""this will simplify taxes"" is horsepuckey.  No one will believe a legitimate financial advisor needs that, but it's exactly what a swindler would do. And that's the problem.  If anything goes wrong, their trust in you will be forgotten, some will say you intended to scam all along, and the structure will be the first thing to convict you.   Money makes everyone mistrusting.  Ironically, the concept is called a ""trust"", and there's a wide body of law and practice for Person X responsibly handling the money of Person Y.  The classic example is Person Y is a corporation (say, a charity) and Person X is on the Board of Directors.  It's the same basic thing.   The doctrine is:" If you go through the web pages of some online brokers, you will find out that some of them allow you to manage friends/relatives accounts from your account as a trusteer. That should really solve your underlying problem, you will need only one login, etc. (Example: https://www.interactivebrokers.com/ff/en/main.php) If I understand it right it will even allow you to make one trade splitting the cost and returns among the other accounts, but you would have to verify that. Anyways, that will save you a lot of trouble and your broker can probably help you with the legal necessities. "All the other answers posted thus far discuss matters from the perspective of US tax laws and are unanimous in declaring that what the OP wants to do is indeed a very bad idea. I fully agree: it is a bad idea from the perspective of US tax laws, and is likely a bad idea from the perspective of Indian tax laws too, but what the OP wants to do is  (or used to be) common practice in India. In more recent times, India has created a Permanent Account Number (""PAN number"") for each taxpayer for income tax purposes, and each bank account or investment must have the owner's (or first-named owner's, in case of a joint account) PAN number associated with it.  This most likely has decreased the popularity of such arrangements, or has led to new twists being used. The OP has not indicated the residence and citizenship of his family (or his own status for that matter), but if they are all Indian citizens resident in India and are Hindus, then there might be one mechanism for doing what the OP wants to do: apply for a PAN number in the name of the Hindu Undivided Family and use this number to carry out the investments in the name of the Hindu Undivided Family.  (There presumably are similar statuses for undivided families for other religions, but I am not familiar with them). There are lots of matters here which are more legal questions than personal finance questions: e.g. if the OP is a US tax resident, then the family presumably will not be able to claim Hindu Undivided Family status since the OP has been divided from the family for tax purposes (or so I think). Even if HUF status is available, the OP might not be able to act as the pater familias while his father is alive, and so on.  Consultation with tax lawyers, not just chartered accountants, in India is certainly advisable." Assuming you and your family always get along and everyone is happy with the situation... Should you become ill, die, or go on government benefits for some catastrophe, the government will look at all those funds as YOURS, and now your wonderful family is hurt by the estate tax and/or expectations of how much of the bill you handle before support kicks in. Additionally, should you ever reach a point where you are married and then facing divorce (even if no fault of your own), all that investment is now up for grabs in equitable distribution.  So your family's entire investment fund is at risk. "There are two issues. The first is that you can manage all of your family's money. The second issue arises if you now ""own"" all of your family's money. As far as entities go, it is best to keep money or assets in as many different hands as possible. Right now, if someone sued you and won, they could take away not only your money, but your parents' and brother's money, under your name. Also, there are gift, estate and inheritance tax consequences to your parents and brother handing all their money to you. You should have three or four separate ""piles"" of money, one for yourself, one for your brother and one for each of your parents, or at least both of them as a couple. If someone sued one parent, the other parent, your brother and you are protected. You can have all these piles of money under your management. That is, your parents and brother should each maintain separate brokerage accounts from yours, and then give you the authorization to trade (but not withdraw from) their accounts. This could all be at the same brokerage house, to make the reporting and other logistics relatively easy." You can perfectly well manage their wealth without transferring their money into your account first. Just make them open their own account on their name then ask them for credentials and then manage their money from within their own account. That way everyone will be taxed according to their wealth (which is probably advantageous but you probably have to help them with the paperwork) and it is clear at every time what belongs to whom and your relatives can at every time access their wealth. These are big advantages (for them). This keeps you at the role of an adviser (a very active one though) which should have almost zero legal ramifications for you unless you try to deceive your relatives. You may want to shift wealth between accounts to minimize tax burdens, but that comes at the risk that should the family relations get worse this might result in anger. You could open up a registered society, all members getting shares and voting rights, making you the CEO, but that should be a lot of paperwork and maybe only a good idea for large amounts of money. If you decide to transfer money between accounts of different persons this is like a gift. It might invoke a gift tax in your area. All in all, I strongly advise you to make them all open up their own accounts and then just operate the accounts and manage their wealth in their name. Sell it to them as the solution that retains them maximum ownership. My answer is with respect to the United States. I have no idea about India's regulatory environment. You are opening yourself up to massive liabilities and problems if you deposit their money in your account. I managed investment accounts as a private investment advisor for years (those with less than 15 clients were not required to register) until Dodd-Frank changed the rules. Thus you would have to register as an advisor, probably needing to take the series 65 exam (or qualifying some other way, e.g. getting your CFP/CFA/etc...). I used a discount broker/dealer (Scottrade) as the custodian. Here's how it works: Each client's account was their own account, and I had a master account that allowed me to bill their accounts and manage them.  They signed paperwork making me the advisor on their account.  I had very little accounting to handle (aside from tracking basis for taxed accounts). If you take custody of the money, you'll have regulatory obligations. There are always lots of stories in the financial advisor trade publications about advisors who go to jail for screwing their clients. The most common factor: they took custody of the assets. I understand why you want a single account - you want to ensure that each client gets the same results, right? Does each client want the same results?  Certainly the tax situation for each is different, yes?  Perhaps one has gains and wants to take losses in one year, and the other doesn't. If their accounts are managed separately, one can take losses while the other realizes gains to offset other losses. Financial advisors offer these kinds of accounts as Separately Managed Accounts (SMAs). The advisors on these kinds of accounts are mutual funds managers, and they try to match a target portfolio, but they can do things like realize gains or losses for clients if their tax situation would prefer it. You certainly can't let them put retirement accounts into your single account unless the IRS has you on their list of acceptable custodians. I suggest that you familiarize yourself thoroughly with the regulatory environment that you want to operate under. Then, after examining the pros and cons, you should decide which route you want to take.  I think the most direct and feasible route is to pass the Series 65, register as an investment advisor, and find a custodian who will let you manage the assets as the advisor on the account. Real estate is another matter, you should talk to an attorney, not some random guy on the internet (even if he has an MBA and a BS in Real Estate, which I do). This is very much a state law thing. "I transfer all their funds to my bank account Are they paying tax on that transfer?  Gifts under $14,000 are excluded from taxation in the US, but they're going going to have a hard time arguing that it is a gift (since they expect it back).  The taxes are almost certainly going to exceed the amount you can make from your investments in the short term, and if they aren't paid then your ""clients"" are going to be in hot water with the IRS. You need to have something set up that establishes you as merely managing the funds, and not receiving them personally as a transfer.  The other answers have good suggestions." Aside from the fact that there are massive problems with taxes, liability, fiduciary responsibility, and (assuming you're accepting any sort of compensation at all) licensing. The mere fact that you're asking this question indicates that you're probably not suitably qualified to handle this for others. Why not have someone qualified handle this?
Labor - I have a fairly decent sized extended family.  Between us we cover quite a bit of experience in different trades and professions.  So as a result when we undertake significant home projects we tend to work together to complete them.  We redid my parent kitchen for basically the cost of the cabinets and tile.  My grandmothers bathroom when she could no longer get into the tube for the cost of fixtures and tile.  We partitioned my upstairs giant bedroom into 2 bedrooms and a bathroom.  And lots of other things.   We also have a family farm as at harvest time we all pitch in and work long hours.  Without that teamwork our entire family would have a much poorer quality of life. "Someone asked this over in /r/darknetmarkets , they were asking how to profit off NV specifically, but here's what I wrote there, I'd be curious what you guys think:  &gt; Go back in time about 6 mo, case the medical scene for movers and shakers, write some proposals to help them expand. Traditional banks won't touch financing these guys with a 10ft stick right now, the Fed has told them straight up they will lose FDIC membership if they touch ""drug money"" (cough cough tobacco and alcohol don't count? cough cough). If you don't have a time machine, either come up with a way to be a bank to these guys without going to a Fed lockup, or go finance expansion in the next state which legalizes. It's gonna be a while until these guys get integrated with the regular money system to the point they have stocks and such. Or maybe the Fed freezing them out as they make a fortune will just push forward crypto currency and hasten the collapse of the current money oligarchy, who knows.  There was also some comments about shipping from NV to home states, which is probably a bad idea for many reasons. I did however feel I can offer some insight on a legal president for this kind of behavior,  but exactly how legal reshipping to avoid direct shipping of a purchase to a state is (I mean, once it's your proper legal property and you're just shipping it to yourself that does seem legal, right?) or if it would get the same blind eye when done with pot are huge unknowns:  &gt;I'm sure the Feds will not see a problem with sending drugs to yourself across state lines! Actually funny enough I live in the wine region of CA and there is a whole business here of wine ""storage and shipping"" places. It's up to the states to decide how or if they allow alcohol to be shipped into their state from others, and a bunch of state have very complex rules or just don't allow it. So if you come out here for tourism, drink some wine at a winery, like it, and ask if you can have some shipped home, the answer is about 50/50 to be 'no'. And if you're a average income pleb, that's your answer. If you're some rich dude however, you can say ""ah gotcha, pesky laws... well here's the address of my storage and shipping place, send the 2 cases there then"", nobody bats an eye, and off the cases go. Guy goes home, calls up the shipping place, and says ""hey pull those cases, my personal property, and ship them to me"" and, somehow, magically, this is now legal. I have no idea who's taking on the liability here, if the shipping place has them sign off ""we will ship wherever you ask, it's not our job to verify the legality of your request"" then I guess it's on the consumer, but if you have an entire business built around circumventing state law it would seem to me that this should be a legal problem. But, wine is a high-end commodity, rich people make their own rules, and if CA turns a blind eye to this practice they get to collect the sales tax as it's sold in CA and shipped to a location in CA, whereas fighting it would hurt their tourism and also send the tax income to the states being shipped to. C.R.E.A.M. baby!  Re-reading this now I'm not even sure if there IS a liability here. They bought the property in CA, paid tax in CA, and had it sent to a mailing address in CA. What they do after that with their personal property is not the states business, right? I'd imagine this would be drastically different if shipping for resale. Similarly, I think this all only works if you complete the transaction while physically in the state. So at most this might turn on some weed tourism.  The big difference in all of this is that the Fed is fine with alcohol, but not weed, so, while I suspect someone will form such a weed storage and shipping place at some point, I don't really want to be first in line to see how this flys and if it lands you in trouble with the Fed." &gt;We're supplementing their workers' food budgets and medical budgets. That is money that ought to be coming out of Walmart's pocket.  They are not forced to work there. It is really their choice. They also have the ability to supplement their own budgets by working more, or at another company. This is a choice, and the safety nets that the taxpayer subsidizes are supporting these choices, and are not a DIRECT support for Walmart. People have free will. If you can't understand this, then we may as well stop the argument right here.  &gt;Listen, everybody who doesn't come from money is forced to work. Unless you don't mind living outside without medical care, fresh food or family. If you happen to have poor access to education or failed to achieve for some reason then you're forced to take what you can get.  I grew up poor. Government housing, foodstamps, the works. I find it amusing that the majority of people who want to argue about this type of topic with me actually come from a much more well-off situation than me, and then want to make it sound like they know what they are talking about. I never blamed low paying companies for my situation. My parents could have and should have worked harder. And the same goes for many of my poor friends growing up. I see human beings as powerful, amazing things, not victims who are helpless to the whims of others.  &gt;If that job doesn't offer a living wage than you'll have to pick up a few extra shifts or another job altogether.  This is my point exactly!! It's just reality, folks. I'm in that situation myself right now, but I'm not blaming a business owner for trying to make money themselves. Sometimes you're given a shitty situation, life has dealt you a shitty hand, and you have to find your way out of it. It's hard, but sometimes that's life.  &gt;Let's talk about the one that you espouse where high school dropouts get to negotiate with corporations for a living wage and if it doesn't work out that's just fine -- after all nobody is forcing them to take a job.  I don't remember saying high school dropouts get to negotiate for a living wage. I'm pretty sure I said I support *legislation* that will *force* these corporations to pay a living wage. Please don't put words in my mouth.  &gt;People shouldn't have to work more than 40 hours a week just to put food on the table or pay their medical bills.  I agree. I think the government (subsidized by taxpayers, obviously) should provide 100% free medical care to it's citizens. This shouldn't be an issue about a company not paying enough to support an entire family. A greeter at Walmart was never supposed to be able to feed a family of five, sorry, and it's never been that way in the past. Some jobs are not meant to be high paying, and shouldn't be. But I do support universal healthcare, and at least a living wage (enough to support oneself in one's city). "Two typical responses to articles/surveys making such claims:  **1. People use other forms of asset for emergency savings because interest rates are low - clearly false.**  **2. People use other forms of saving than a saving account therefore such surveys as the X% can't handle a $500 emergency are wrong on their face - this is false the vast majority use a savings account.**  I've chosen a topic that absolutely annoys the shit out of me every time it comes up, how people save their money. Every time this topic comes up about X% of americans can't come up with $Y dollars in an emergency or have less than $Z in savings someone inevitably chimes in with the linked response. I have *never* seen anyone attempt to source their hand waving response beyond their own anecdote, which is usually a thinly veiled brag about how financially savvy they are with their wealth. Perhaps people who have no assets, or crippling debt don't go out of their way to brag about it...  I could link multiple reddit posts making a similar response, which I address with my own stock response about once every 1-2 months. Instead I've decided to expand with data from several other sources. This is the prototypical good/bad research problem. If you're asserting something, but qualify your statement with, ""I""m sure we'd find...if we looked into..."" then you're doing it wrong. A good researcher or journalist doesn't put bullshit like that in their work because it's their job to actually look for sources of data; data which should exist with multiple government and independent groups. So let's get started (all data as recent as I could find, oldest source is for 2010):  * [Most americans don't invest in the stock market](https://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf)  About 48.8% of americans owned publicly traded stock directly or indirectly, with a much smaller percent (13.8%) owning stock directly -  pages 18 and 16 respectively. It's important to note the predominance of indirect ownership which suggests this is mostly retirement accounts. It's entirely possible people are irresponsible with their emergency savings, but I think it safe to say we should not expect people to *dip into their retirement accounts* for relatively minor emergency expenses. The reason is obvious, even if it covers the expense they now have to make up the shortfall for their retirement savings. This is further supported by the same source:  &gt;""The value of assets held within IRAs and DC plans are among the most significant compo-nents of many families’ balance sheets and are a significant determinant of their future retirement security.""  Ibid (page 20, PDF page 20 of 41)  There is also a break down of holdings by asset type on page 16, PDF page 16 of 41.  * [This data is skewed by the top 10% who keep more of their wealth in different asset types.](http://www2.ucsc.edu/whorulesamerica/power/wealth.html) For a breakdown between the 1st, 10th, and 90th percentiles see **table 3.**  So far it seems pretty hard to maintain a large percent of americans have their wealth stored outside of savings accounts, mattresses aside.  * [Here's my original reply as to the breakdown of americans assets by type and percent holding.](https://imgur.com/a/DsLxB) Note this assumes people *have* assets. [Source for images/data.](https://www.census.gov/people/wealth/data/dtables.html)  Most people use savings accounts, with runner up falling to checking accounts. This will segue into our next topic which is the problem of unbanked/underbanked households.  * [A large number of individuals have no assets; breaking down by asset types assumes people *have* assets in the first place.](https://www.fdic.gov/householdsurvey/)  To quote the FDIC:  &gt;*""Estimates from the 2015 survey indicate that 7.0 percent of households in the United States were unbanked in 2015. This proportion represents approximately 9.0 million households. An additional 19.9 percent of U.S. households (24.5 million) were underbanked, meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system.""*  That's right there are millions of households *so finance savvy* they don't even have banks accounts! Obviously it's because of low interest rates. Also, most people have a checking account as well as savings account, the percent with ""checking and savings"" was 75.8% while those with ""checking only"" were 22.2% (page 25, PDF page 31 of 88). It's possible in some surveys people keep all their money in checking, but given other data sources, and the original claim this fails to hold up. If the concern was interest rates it makes no sense to keep money in checking which seldom pays interest.  This survey also directly addresses the issue of ""emergency savings"":  &gt; *""Overall, 56.3 percent of households saved for unexpected  expenses or emergencies in the past 12 months.""* (page 37, PDF page 43 of 88)  Furthermore:  &gt;*""Figure 7.2 shows that among all households that saved for  unexpected expenses or emergencies, savings accounts  were the most used savings method followed by checking  accounts:* **more than four in five (84.9 percent) kept savings  in one of these accounts.** *About one in ten (10.5 percent)  households that saved maintained savings in the home, or  with family or friends.""*   Emphasis added.  * [Why don't people have wealth in different asset classes? Well they don't save money.](http://cdn.financialsamurai.com/wp-content/uploads/2014/06/savings-rates-by-wealth-class.png)  This is further supported by the OECD data:  * [Americans ""currency and deposits"" are 13% vs 5.8% for ""securities and other shares"" as % of total financial assets.](https://data.oecd.org/hha/household-financial-assets.htm)  Additionally:  * [Interest earning checking accounts: 44.6% of american households (second image)](https://imgur.com/a/DsLxB)  * [""Among all households that saved for unexpected expenses or emergencies, savings accounts were the most used  savings method followed by checking accounts..."" (page 7, PDF page 13 of 88)](https://www.fdic.gov/householdsurvey/2015/2015report.pdf)  * ~70% saved for an emergency with a savings account vs ~24% who used checking. *Ibid.*  In fairness the FDIC link does state *banked* americans were more likely to hold checking accounts than savings accounts (98% vs ~77% respectively) but that doesn't mean they're earning interest in their checking account. It's also worth noting median transaction account value was for 2013 (this is the federal reserve data) $4100." "&gt; Who gets control of your wealth when you pass away then?  If someone has no remaining heirs in his/her generation then he/she can leave the money to the charity/non-profit of choice.  Of course, it would be illegal to set up the ""give lots of money to Mr. Burns descendants"" endowment." Not knowing the US laws at all, you should worry more about having the best stock portfolio and less about taxes. My 0,02€ They are using a tax arbitrage, a variation of Hollywood Accounting. This is a common tactic adopted by all big companies, including GE, Apple, Microsoft, Google and hedge funds like Bain. The company's management has only one legal duty, to maximize the shareholder value and this is one way of doing it.  Depending on your perspectives, it may be unethical but it definitely is not illegal.   Blame the politicians and people electing them, not the businessmen. "Sure, it's irresponsible for an executor to take actions which endanger the estate.  But what about passivity or inaction?  Put it another way.  Is it the obligation of the executor to avoid making revenue for the estate?  Think about it - what a silly idea!   Consider a 12-unit apartment building full of rent paying tenants.  A tenant gives notice and leaves.  So do 4 more.  With only 7/12 tenants, the building stops being a revenue center and becomes a massive money pit.  Is that acceptable?  Heck no!  Realistically this will be managed by a property management company, and of course they'll seek new tenants, not stopping merely because the owner died.  This situation is not different; the same fiscal logic applies.  The counter-argument is usually along the lines of ""stuff might happen if you rent it out""... true. But the stuff that happens to abandoned houses is much worse, and much more likely: squatters, teen ""urban explorers"", pot growers, copper thieves, winter pipe freeze flooding and wrecking interiors, etc.  Don't take my word on it -- ask your insurer for the cost of insuring an abandoned house vs. a rented one.  Renting brings a chunk of cash that comes in from tenants - $12,000/year on a $1000/mo. rental. And that will barely pay the bills if you have a young mortgage on a freshly purchased house at recent market rates.  But on an old mortgage, renting is like printing money.  That money propagates first to the estate (presumably it is holding back a ""fix the roof"" emergency fund), and then to the beneficiaries.  It means getting annual checks from the estate, instead of constantly being dunned for another repair.  But I don't care about making revenue (outside of putting back a kitty to replace the roof).  Even if it was net zero, it means the maintenance is being done.  This being the point.  It is keeping the house in good repair, occupied, insured, and professionally managed -- fit and ready for the bequest's purpose: occupancy of an aunt.  What's the alternative?  Move an aunt into a house that's been 10 years abandoned?  Realistically the heirs are going to get tired/bored of maintaining the place at a total cash loss, maintenance will slip, and you'll be moving them into a neglected house with some serious issues.  That betrays the bequest, and it's not fair to the aunts. Rental is a very responsible thing to do.  The executor shouldn't fail to do it merely out of passivity.  If you decide not to do it, there needs to be a viable alternative to funding the home's decent upkeep.  (I don't think there is one).  Excluding a revenue-producing asset from the economy is an expensive thing to do."