Would Venmo work for collecting contributions for family vacation home expenses?

Seeking Advice
1

I couldn’t find a post with this exact situation, so looking for some advice.

We have a small cottage held in a trust, and the group managing it is feeling the pressure of maintaining the place financially. It’s not a primary residence for anyone and can’t be zoned as one.

I was thinking about setting up a way for people who use the cottage or attend events there to chip in voluntarily. The idea is to post a Venmo (or similar) account where people can send whatever amount they want.

To keep things organized, I’d set up a separate checking account—not linked to my personal one—to handle these contributions and use it to cover expenses. We’re not talking about huge amounts, just under $15,000 per year.

I’ve also considered whether setting up an LLC or linking Venmo to an account in the trust’s name would make sense, but I’m not sure about the mechanics of that. This isn’t a business, and there’s no expectation of making a profit.

Is this a reasonable plan, or am I overcomplicating it?

2

Since the trust already exists, this should be simple.

  1. Open a bank account in the trust’s name.
  2. Accept contributions through ACH, Venmo, or another method.
  3. Pay cottage expenses directly from the trust’s account.

Just don’t connect your personal Venmo. Instead, create a new one specifically for the trust. If all you’re trying to do is cover expenses, this shouldn’t be complicated.

3

@Dev
That makes sense, thanks. There’s already a bank account, but I’m not sure whose name it’s under.

As for contributions, using ACH transfers instead of Venmo might be a better way to handle it. Haven’t done ACH in a while, but I guess it’s still pretty easy.

4

Venmo could work, but I’m not sure why it needs to be tied to the trust unless people are worried about accountability. If it were a commercial property where expenses were deductible, that would be different.

5

@Noelle
Yeah, I was just looking for an easy way to collect contributions. I’m not directly on the account (just trying to help out the older folks in charge).

It’s not a rental or anything, just a way for people to pitch in like they would for gas money or shared expenses.

6

@nellysmith
One thing to think about—Venmo might generate a 1099 if enough money is collected. Have you considered that?

7

Amir said:
@nellysmith
One thing to think about—Venmo might generate a 1099 if enough money is collected. Have you considered that?

That shouldn’t apply here. These would be personal contributions, not payments for goods or services. We’d also be using a personal Venmo account, not a business one.

Plus, the transactions would be small—things like food, small repairs, and upkeep.

8

@nellysmith
If you’re collecting close to $15K per year, you might still cross the $600 reporting threshold.

I get small Venmo payments too, usually under $600 per year, so it’s not an issue. But even a one-time reimbursement could push you over. Just something to keep in mind.

9

Would direct bank transfers be safer? Most banks have Zelle, which might be the easiest way to collect money.

10

Kenzie said:
Would direct bank transfers be safer? Most banks have Zelle, which might be the easiest way to collect money.

Not sure Zelle is any better than Venmo or PayPal. If something goes wrong with Zelle, getting your money back is almost impossible.

11

@Mason
I was just thinking that since Zelle runs through the banks, it might be more reliable than a third-party app.

12

Kenzie said:
@Mason
I was just thinking that since Zelle runs through the banks, it might be more reliable than a third-party app.

Zelle is still a third-party service, even though it’s built into banking apps. Not sure that makes it more secure.

13

Kenzie said:
Would direct bank transfers be safer? Most banks have Zelle, which might be the easiest way to collect money.

I figured it’s the same thing in practice. There’s already a checking account for the group, managed by the treasurer.