Last year’s OBBBA legislation included “Trump Accounts,” and you are likely to start hearing more about them in the next few months. They are considered retirement accounts, and unlike anything we have seen before. While you will hear a lot about their advantages, it’s important you understand all of the rules. Keep reading, especially if you are a grandparent considering funding a Trump account for your grandchild.
5 Key Takeaways
- Contributions can’t start yet. Trump Accounts (a new tax-deferred savings vehicle for children) won’t accept contributions until July 4, 2026, though accounts can already be opened via Form 4547 or forms.trumpaccounts.gov.
- Grandparents face strict limitations on opening accounts. Despite many grandparents reportedly setting up Trump Accounts for grandchildren, IRS rules place grandparents last in line — behind legal guardians, parents, and adult siblings — when it comes to who is legally authorized to open one.
- A grandparent can only open an account for a grandchild born before 2025 if no parent, legal guardian, or adult sibling is “available” — but the IRS has not yet defined what “available” actually means, creating significant legal ambiguity.
- Grandparents may be unknowingly committing perjury. By signing Form 4547 or completing the online election, grandparents are legally representing that no higher-priority person is available to open the account — but neither the form nor the website clearly warns them of this, leaving them exposed to potential perjury liability.
- Grandparents should wait for IRS guidance before acting. Until the IRS clarifies the rules — particularly what “available” means and the consequences of an improper election — grandparents are advised to hold off on opening Trump Accounts for grandchildren to avoid legal risk.
To read more about why grandparents need to be especially careful, continue reading here.
As a Certified Financial Planner® and a member of Ed Slott’s Master Elite IRA Advisor Group™, I specialize in helping clients navigate these complex rules. At Prism Planning and Solutions Group, our mission is to ensure you feel well-cared for, informed, and secure about these important decisions. I can help you understand your specific situation, avoid costly mistakes, and create a Roth conversion strategy that aligns with your overall financial goals.
► Schedule your complimentary Introductory Meeting: Ask Julia
Julia Peloso-Barnes, CFP® , is CEO/Sr. Wealth Adviser and Founder of Prism Planning and Solutions Group, a dba of PPSGRP, LLC (PPS), an SEC Registered Investment Advisor. .Julia is also a member of the Ed Slott Master Elite Advisor Group and has been helping clients seek empowerment through collaborative problem-solving for more than 30 years. Learn more here.
Neither Prism Planning and Solutions Group nor PPS provide tax or legal advice, and nothing in this communication should be treated as such. This communication should not be interpreted as a recommendation for a specific investment, legal or tax-planning strategy. We provide this material for informational purposes only. We have not independently verified all information and it may not reflect the most current regulatory guidance. This article discusses general tax and legal considerations and should not be relied upon as legal or tax advice. Before making any decisions related to your own tax, legal and/or investment situation you should consult the appropriate professionals.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
