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

If your baby is born on or after January 1, 2025, the federal government has allocated $1,000 for your child. The account is currently available, with contributions opening on July 4, 2026. However, many families have yet to take action to claim it.

This account is known as a Trump Account, established by the One Big Beautiful Bill Act, which was signed into law in 2025. It represents one of the most significant financial resources for young families in recent years. This initial investment can grow tax-advantaged for up to 18 years, potentially becoming a substantial amount by the time your child is ready to access it. Here’s what you need to know and what steps to take next.

What Is a Trump Account?

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

In addition to this government seed contribution, parents, grandparents, and other family members can contribute up to $5,000 each year. Before making personal contributions beyond the $1,000 deposit, it’s advisable to consult with your attorney first. There are still some unresolved regulatory issues regarding the gift tax implications of family contributions, and the best approach for your family will depend on your unique circumstances. Employers can also contribute up to $2,500 annually through a qualified written plan. If you run your own business, you could potentially contribute both as a parent and as an employer, allowing for a total of $7,500 per year to be added to the account. Importantly, the government’s $1,000 does not count towards either of these limits.

The account is designed as a specific type of individual retirement account for children. It accumulates value through stock market gains on a tax-deferred basis, which means that while the funds are invested, there are no taxes on the growth. However, ordinary income tax will apply when withdrawals are made. Withdrawals are not permitted until the child reaches 18 years of age. Once the child turns 18, the account transitions into an IRA that the young adult can manage directly, but any distributions taken before the age of 59½ will incur income tax and a 10% early withdrawal penalty. This 18-year period is crucial: a $1,000 deposit growing at a conservative 7 percent average annual return can grow to about $3,400 by maturity, without any extra contributions. If family members make even modest contributions during these years, the account can provide a significant financial advantage. The investment strategy for the account is important, and you will actively decide how to invest when you set it up.

Trump Accounts are not restricted to infants born between 2025 and 2028. Any child aged 17 or younger who has a valid Social Security number can have an account established for them. However, the complimentary $1,000 pilot contribution is exclusively available for children born within that four-year timeframe.

In summary: A Trump Account is a federally funded, tax-advantaged investment account for your child. The $1,000 is yours to claim, and any additional contributions you make will grow alongside it for up to 18 years.

How to Open One

To set up a Trump Account, families can either submit a one-page Form 4547 to the IRS or access the online portal at TrumpAccounts.gov. Contributions can start as early as July 4, 2026. The form requires basic details about the child, including their Social Security number. If your child doesn’t have a Social Security number yet, you’ll need to get one before you can complete the filing.

To receive the government’s $1,000 pilot contribution, you must make a clear choice on the form: check the box in Part III, line 7. This choice is what activates the deposit. While the account can be opened and used without it, the pilot contribution won’t be made unless you make that election, even if the account is already operational.

After the account is established, you’ll need to select how to invest the funds. If you don’t actively choose an investment option, the funds will automatically go into a government-managed choice. Most families will prefer to look over the available investment options and make a conscious decision instead of going with the default.

In summary: The entire process takes just a few minutes. Begin at TrumpAccounts.gov or consult your tax preparer about Form 4547. Don’t just stop at opening the account: make sure to elect the $1,000 in Part III and choose your investment options.

How This Relates to Your Family’s Plan

This is where the majority of discussions about Trump Accounts conclude, and the genuine planning dialogue starts.

A Trump Account represents a new asset registered in your child’s name. Just like any asset your family possesses, it should be integrated into a cohesive plan. Several important questions arise from an estate planning viewpoint.

What will happen to this account if something occurs to you before your child reaches 18? It is essential to designate a successor custodian, the individual who will take over the management of the funds if you are unable to do so. This person should be chosen deliberately, rather than leaving it to chance or the court’s judgment. Without a designated successor custodian, a court may end up deciding who will manage the account for your child. Courts do not know your family as well as you do, and the process can take time that your child’s finances should not have to endure.

How does this account fit into your overall estate plan? If you have a will or trust, your child’s Trump Account might not be included in the way you expect. Investment accounts with designated custodians function independently of a will. Additionally, the account does not automatically transfer into a trust you have created for your child’s benefit. If you wish for the account to be managed according to the terms of a trust you have set up, this must be specifically coordinated with your attorney. It does not occur automatically.

Does this account influence your thoughts on what you will leave for your child? For many families, the Trump Account serves as the initial catalyst for discussions about building generational wealth. While it does not replace a comprehensive plan, it can certainly initiate one.

If grandparents or other relatives are already contributing to 529 accounts or other savings options for your child, the Trump Account introduces an additional layer. The inquiry of how everything fits together, the purpose of each account, who contributes to which, and what will happen to each if circumstances shift, should be included in a thorough family financial and estate plan.

For families with multiple children or those with kids from previous relationships, questions arise: whose money is this, legally? Who oversees it? What occurs if you and your co-parent part ways? These are important questions to address now rather than later.

If you haven’t established a comprehensive plan yet, you’re not alone. Many young families come across the Trump Account before they have a will, a designated guardian, or a trust in place. This isn’t an issue; it’s a valuable starting point. The account provides a solid reason to create the complete structure you need right now.

The key takeaway: A $1,000 account for your child serves as a foundation, not a full plan. The real question is what you will construct around it and whether your trusted individuals are aware of what to do if something happens to you.

What You Can Do Right Now

We assist young families in developing a Life & Legacy Plan tailored to your current situation, rather than just relying on default legal provisions. The Trump Account is an excellent prompt to initiate that discussion today.

Book a free 15-minute discovery call, and let’s ensure your family’s plan is set up properly.

Schedule a complimentary 15-minute consultation to learn more.

This article is a service of Kristen Wong of Seasons Estate Planning, APC, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session™.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.