7 Money Moves To Make If Your Family Member Lacks Legal Status

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Not having access to financial institutions can be especially challenging and disheartening for those who are immigrants lacking permanent legal status. If your loved one falls under this category, they still have plenty of options available.

“As a CPA with over 40 years of experience advising high net worth families, I have helped clients steer difficult circumstances,” said John F. Pace, CPA, and tax manager for Pace & Associates CPAs. “For undocumented loved ones, the options may be limited, but having basic financial protections in place is critical.”

Below are some key money moves to make to help your family member lacking permanent legal status.

Also, read more about the debate over whether people lacking legal status should be eligible for retirement programs such as Social Security and Medicare.

Cash on Hand

“I advise clients to set aside emergency funds to cover essential expenses for at least 6-12 months,” Pace said. 

Keeping this in a safe or safety deposit box ensures it’s accessible in case of changes to legal status.

Dalton Tigner, agent at Tigner Insurance & Associates, agreed.

“Cash is critical when traditional accounts aren’t an option,” he said. “I advise clients to put aside emergency funds that can cover essentials for 6-12 months in a safe or safety deposit box. This ensures basic needs are met no matter what changes may come.”

Cash-Based Wealth Management via Prepaid Cards

“I frequently advise clients with undocumented family members to explore prepaid debit cards as a substitute for traditional banking,” said Angelo Crocco, CPA and owner of AC Accounting. “Cards like Bluebird by American Express or Chime are incredibly effective in avoiding cash risks while offering direct deposit and online bill pay, which can mimic the benefits of a bank account.”

He has seen this solution work for many families, especially when traditional banking isn’t accessible due to documentation requirements.

Jeffrey Zhou, CEO and founder of Fig Loans, which specializes in alternative financing and financial wellness, advised the same.

“For undocumented family members who lack access to traditional banking, prepaid cards are a great alternative to manage money securely,” Zhou said. “These cards can be used at stores, online, and for paying bills, offering flexibility and convenience without the need for a bank account.” 

One of the main benefits, he explained, is that they reduce the reliance on cash, which can be risky to carry around. 

Additionally, prepaid cards can help build financial discipline by allowing users to monitor their spending and stick to a set budget.

“To make the process easier, find a card with low maintenance fees and easy reload options, such as cash deposits or direct transfers,” Zhou said.

Security is another key factor, Zhou added.

“Many prepaid cards offer fraud protection and dispute resolution, which are critical in safeguarding their funds,” he said. “With prepaid cards, your loved ones can manage their finances more confidently and securely. It’s an easy-to-use solution that removes many of the barriers undocumented individuals face in the traditional banking system.”

ITIN-Based Loans and Credit Building

Another strategy Crocco always emphasizes is using financial services based on your individual taxpayer identification number (ITIN) to help build credit. 

“Over the years, I’ve guided several clients through the process of accessing loans or credit cards through their ITIN, especially when homeownership or auto financing was on the horizon,” Crocco said. “Platforms like Stilt and Self Lender have been game changers in helping undocumented individuals establish credit, which opens up many financial doors.”

Asset Protection With Nominee Trusts

For clients concerned about protecting their assets, Crocco often recommends nominee trusts as a way to manage property while keeping a low profile. 

“This is a tactic I’ve seen work especially well for those with privacy concerns or legal complications surrounding asset ownership,” Crocco said. 

With the right trusted individual, he said, families can safeguard their assets without exposing them to unnecessary risk.

Invisible Insurance With Informal Lending Circles

“In my experience, lending circles have been an overlooked but powerful tool for many clients,” Crocco said. 

Known as tandas or susus in some communities, these systems provide a trusted way to save and borrow within a community, he said. 

“For clients who prefer a more formalized system, I often point them to non-profits like Mission Asset Fund, which offer these circles as a way to both save and build credit,” Crocco said. “It’s a brilliant, culturally familiar solution that helps families grow their wealth without traditional banking barriers.”

Community Credit Unions 

According to Stephen Boatman, CFP and principal at Flat Fee Financial, community credit unions are excellent resources for undocumented family members seeking to manage their money securely. 

“These institutions often have more flexible requirements, allowing individuals without Social Security numbers to open accounts and access financial services like loans or credit cards,” Boatman said.

By using a credit union, your family members can safely save money, avoid the risks of handling cash and even start building a credit history. 

Boatman said, “It is always a good idea to seek out a credit union that offers customized programs for immigrants or undocumented individuals, since these institutions tend to have staff trained to assist with unique financial concerns.”

Boatman noted that many credit unions also provide low-interest loans and other financial products that may not be accessible through traditional banks, which can be a huge help when unexpected expenses arise. 

“More importantly,” he said, “credit unions tend to be community oriented, so your loved ones will receive more personalized support and guidance.” 

By building a relationship with a credit union, he said, they can create a more stable financial foundation and access resources to improve their financial literacy. 

“Encouraging undocumented family members to leverage credit unions not only helps them manage their current finances but also opens the door to future financial opportunities,” Boatman said. “It’s a proactive approach to securing their financial well-being.”

Permanent Life Insurance Purchased With an ITIN or SSN 

Permanent life insurance purchased with an ITIN or Social Security Number (SSN) also helps provide for family if something happens. 

“While payouts are restricted in some ways, the death benefit and potential cash value offers financial protection for loved ones left behind,” Tigner said. “Taking these proactive steps, as difficult as the circumstances may be, allows families a measure of stability and control over their financial future together, regardless of legal status.”

Pace agreed.

“Taking control of the options available, however difficult, allows families stability and security together despite circumstances,” he said. “My role is steering clients to build that safeguard. Reach out to local resources for help. Someone will want to support your community.”

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