Trump Accounts: What Every Parent of a Baby Born 2025–2028 Needs to Know

A Trump Account is a tax-advantaged investment account created for a child

If your baby was born on or after January 1, 2025, the federal government has set aside $1,000 for your child. The account is available now. Contributions opened on July 4, 2026. And most families have not yet taken the step to claim it.

The account is called a Trump Account. It was created by the One Big Beautiful Bill Act, signed into law in 2025, and it is one of the most significant new financial tools for young families in years. A seed investment that grows tax-advantaged for up to 18 years can become something meaningful by the time your child is ready to use it. Here is what you need to know, and what you should do next.

What Is a Trump Account?

A Trump Account is a tax-advantaged investment account created for a child. For every U.S. citizen born between January 1, 2025 and December 31, 2028, the federal government has committed to making a one-time $1,000 deposit, provided the child has a valid Social Security number.

Beyond that government seed contribution, parents, grandparents, and other family members can contribute up to $5,000 per year. Before making personal contributions beyond claiming the $1,000 deposit, it's worth a call with your attorney first. There are unsettled regulatory questions about the gift tax treatment of family contributions that are still being worked out, and the right answer for your family depends on your specific situation. Employers can contribute up to $2,500 per year through a qualified written plan. If you own your own business, that means you could potentially contribute both as a parent and as an employer, for a combined $7,500 per year in additions to the account. The government's $1,000 does not count against either limit.

The account is structured as a type of individual retirement account for the child. The account grows through stock market returns on a tax-deferred basis, meaning no taxes on the growth while the funds are invested, but ordinary income tax applies when distributions are eventually taken. The funds cannot be withdrawn before the child turns 18. At 18, the account converts to an IRA the young adult controls directly, though distributions before age 59½ are subject to income tax and a 10% early withdrawal penalty. That 18-year window is significant: a $1,000 deposit growing at a modest 7 percent average annual return becomes roughly $3,400 at maturity, without any additional contributions. Add even moderate contributions from family members over those years and the account can represent a meaningful head start. How the account is invested matters, and that is an active decision you make when you open it.

Trump Accounts are not limited to babies born in the 2025 to 2028 window. Any child age 17 or younger with a valid Social Security number can have an account opened on their behalf. The free $1,000 pilot contribution, however, is only available for children born in that four-year window.

The bottom line: A Trump Account is a federally seeded, tax-advantaged investment account for your child. The $1,000 is yours to claim. The contributions you add on top grow alongside it for up to 18 years.

How to Open One

To open a Trump Account, families can file a one-page Form 4547 with the IRS or use the online portal at TrumpAccounts.gov. Contributions may begin as of July 4, 2026. The form walks through basic information about the child, including their Social Security number. If your child does not yet have a Social Security number, you will need to obtain one before completing the filing.

To claim the government's $1,000 pilot contribution, you must make an affirmative election on the form: check the box in Part III, line 7. That election is what triggers the deposit. The account can be open and active without it, but without that election, no pilot contribution follows even though the account is up and running.

Once the account is open, you will need to make an investment selection. If you do not actively choose how the funds are invested, they default into a government-managed option. Most families will want to review the available investment choices and make an active decision rather than accepting the default.

The bottom line: The process takes minutes either way. Start at TrumpAccounts.gov or ask your tax preparer about Form 4547. Do not stop at opening the account: elect the $1,000 in Part III and make an investment selection.

What This Has to Do with Your Family's Plan

Here is where most of the coverage on Trump Accounts stops, and where the real planning conversation begins.

A Trump Account is a new asset in your child's name. Like every asset your family holds, it needs to fit into a coordinated plan. Several questions matter from an estate planning perspective.

What happens to this account if something happens to you before your child turns 18? The account needs a successor custodian, the person who takes over management of the funds if you are no longer able to do so. That person needs to be named intentionally, not left to chance or a court's discretion. Without a named successor custodian, a court may be the one deciding who manages the account on your child's behalf. Courts do not know your family the way you do, and the process takes time that your child's finances should not have to wait on.

How does this account interact with the rest of your estate plan? If you have a will or trust, your child's Trump Account may not be covered the way you think. Investment accounts with designated custodians operate outside a will. The account also does not automatically flow into a trust you have set up for your child's benefit. If you want the account managed according to the terms of a trust you have established, that needs to be specifically coordinated with your attorney. It does not happen by default.

Does this account change how you are thinking about what you will leave your child? For many families, the Trump Account is the first real conversation starter about building generational wealth. It does not replace a complete plan, but it can begin one.

If grandparents or other family members are already contributing to 529 accounts or other savings vehicles for your child, the Trump Account adds another layer. The question of how all of it fits together, what each account is for, who contributes to which one, and what happens to each if circumstances change, belongs in a complete family financial and estate plan.

And for families with more than one child, or children from a previous relationship: whose money is this, legally? Who manages it? What happens if you and your co-parent separate? These are questions worth answering now, not later.

If you do not have a complete plan in place yet, you are not alone. Many young families encounter the Trump Account before they have a will, a named guardian, or a trust. That is not a problem. It is a useful entry point. The account gives you a concrete reason to put the full structure in place now.

The bottom line: A $1,000 account for your child is a starting point, not a plan. The question is what you build around it, and whether the people you trust know exactly what to do if something happens to you.

What You Can Do Right Now

As your Personal Family Lawyer® firm, I help young families build a Life & Legacy Plan that is designed for where your life actually is, not just what the default legal rules would produce. The Trump Account is a good reason to start that conversation now.

Click here to schedule a complimentary 15-minute consultation to learn more and get started today:

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