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• Which children qualify for the $1,000 contribution
• How and when an election must be made
• Treasury's procedures for processing contributions
• Timing requirements
• Verification and administrative requirements

The fact that a child can open a Trump Account does not automatically mean they qualify for the $1,000 pilot contribution.

Who Is Eligible?

To establish a Trump Account, a child generally must:

• Be under age 18
• Have a valid Social Security Number
• Be a living child (accounts cannot be established before birth)

The account beneficiary is always the child. An authorized individual (typically a parent or guardian) must establish and manage the account during childhood. There is also a hierarchy of who this authorized individual can be. If you are a grandparent wanting to set this up for your grandchild, I’d take a moment to pause. The parent/guardian gets first dibs to create the account, and there can only be ONE Trump account per eligible child.

Who Qualifies for the $1,000 Government Contribution?

To receive the pilot contribution:

• Child must be born between January 1, 2025 and December 31, 2028
• Child must be a U.S. citizen
• Child must have a valid Social Security Number
• An election must be properly filed

The Deadline Many Families Will Miss

A Trump Account generally needs to be established before January 1 of the year the child turns 18. Once that date passes, a new Trump Account cannot be established, although existing assets may still be eligible for rollover treatment under applicable rules.

For practical purposes:

• If a child is already turning 18 this calendar year, it is too late to establish a new account.
• Families should act sooner rather than later.

How to Open a Trump Account

Current guidance (which is a bit lackluster and highly confusing) indicates the following process:

Step 1: Confirm Eligibility

Verify:

• Child's date of birth is within eligibility window
• They have a valid U.S. Social Security Number
• U.S Citizenship status
• If seeking the government-funded pilot contribution, was born between January 1, 2025 and December 31, 2028

Step 2: Open the Account

The authorized individual (typically a parent or legal guardian) will need to establish a Trump Account for the child through an approved provider.

Current guidance indicates:

• The U.S. Treasury has designated The Bank of New York Mellon (BNY) as the program's financial agent.
• Robinhood has been selected as the initial trustee and account platform for Trump Accounts.

Based on current information, families should expect to open the account directly through the approved platform, similar to opening a custodial investment account. However, Treasury has not yet released final operational procedures confirming exactly how account onboarding will occur.

Step 3: Complete the Election

Opening a Trump Account alone may not be sufficient to receive the government's $1,000 pilot contribution.

Current guidance references:

• Form 4547, and/or
• A future Treasury online election portal

The purpose of this election is to notify Treasury that an eligible child has a qualifying Trump Account and is requesting consideration for the pilot contribution.

Step 4: Link and Verify the Child

The authorized individual will need to provide information necessary to verify the child's identity and eligibility. Only one Trump Account may be maintained for an eligible beneficiary at any given time.

Step 5: Receive the Pilot Deposit

Once Treasury processes the election, the $1,000 contribution is deposited into the account.

Important Timeline

January 1, 2025: Pilot eligibility period begins

July 4-5, 2026: Contributions expected to begin

2025-2028: Eligible birth years for $1,000 contribution

Age 18: Growth period ends

Current regulations remain proposed rather than final, meaning operational details may still change.

The Two Phases of a Trump Account

Phase 1: Growth Period

Birth through December 31 of the year the child turns 17. Restrictions include:

• No distributions (except limited exceptions)
• Limited investment options. Refer to investment section of this article for details.
• No aggregation with traditional IRAs
• Contributions are not deductible, unless made by an employer
• Contributions create basis

Phase 2: Post-Growth Period

Begins after child turns age 18. New options become available:

• Traditional IRA rules generally apply
• Roth conversions permitted (this is the biggie)
• Transfers to other IRAs permitted
• Rollovers to eligible retirement plans permitted
• Broader investment choices become available

This transition period may create significant planning opportunities.

Contribution Rules

Contributions generally cannot begin before July 2026. There are five contribution categories:

Government-funded $1,000 deposit.

Parents, grandparents, relatives, and friends may contribute. Current limit:

• $5,000 annually**
• Indexed beginning in 2028

Unlike a Roth IRA: No earned income is required (another biggie).

3. Employer Contributions

Employers may contribute up to:

• $2,500 annually
• Excluded from employee income
• Deductible to employer
• Counts toward annual limits (important to remember)

4. Qualified General Contributions

Governmental entities and nonprofits may contribute through Treasury-administered procedures.

5. Qualified Rollovers

Certain trustee-to-trustee transfers are permitted under specific rules.

**As of today, contributions do not count toward the annual gift tax exclusion. As a result, IRS Form 709 (Gift Tax Return) must be filed for any contribution made, regardless of the amount. The contribution will reduce the donor's $15 million lifetime estate tax exemption, but generally will not result in any gift tax being owed.

Investment Restrictions

During the growth period, investments are intentionally narrow.

Allowed:

• Broad-based index mutual funds
• Broad-based index ETFs
• S&P 500 tracking funds
• Similar U.S. stock index funds

Must generally:

• Track broad U.S. equity indexes
• Have expenses below 0.10%
• •Avoid active management

Investments that are NOT permitted include sector funds, ESG-specific funds, leveraged funds, inverse funds, and cash holdings beyond temporary needs. Let me repeat that last part again incase you missed it, no cash holding beyond temporary needs. I love this. All contributions are required to be invested, which is exactly how I believe it should be for a child with a very long time horizon. Compound growth!!!

How Trump Accounts Compare to 529 Plans, Roth IRAs, and Custodial Accounts

Where We See Planning Opportunities

Trump Accounts shouldn’t and wouldn’t be able to replace 529 plans, custodial accounts, or Roth IRAs, but they do provide a nice complement to the planning strategies we can implement for children.

Potential Use Cases – How BFA will be incorporating these accounts to client planning

• Children without earned income. A Roth IRA isn't available yet, but a Trump Account may be.
• Grandparent gifting strategies. Annual contributions can help build retirement assets decades before workforce entry.
• Future Roth Conversion Planning. Once growth-period restrictions end, strategic Roth conversions may become attractive. This is the planning opportunity that made my ears perk up. At 18, your child’s tax bracket is usually low. A roth conversion at this time could give them a massive boost in after-tax retirement assets that are poised to grow tax-free for the rest of their lives.

What We Still Don't Know

Several important questions remain unresolved. Areas awaiting additional guidance include:

• Excess contribution correction procedures
• Post-growth-period administration
• Coordination among multiple contributors
• Operational implementation details
• Reporting requirements
• State tax implications on Trump account earnings

Financial professionals should expect additional Treasury and IRS guidance over time. It is a personal priority of mine to track these outstanding bits of information so our clients don’t have to.

The Bottom Line

If you know a child born between 2025 and 2028, don't ignore this opportunity. At a minimum, eligible families should strongly consider:

1. Confirming eligibility
2. Filing the required election
3. Opening the account
4. Receiving the $1,000 government contribution
5. Evaluating with your financial advisor whether additional family contributions make sense

The long-term use case for these accounts remains unclear. 

Will Trump Accounts replace 529 plans? Definitely not.

Will they replace Roth IRAs? Absolutely not.

But they create a brand-new planning tool that didn't previously exist: a retirement account that can begin at birth, receive government seed money, and potentially compound for decades before its owner ever receives a paycheck. That's worth paying attention to.