How families, grandparents, and generous givers can help the next generation start building
At Goodwin Investment Advisory, we know families are sorting through a lot of new rules, headlines, and planning opportunities right now. The new Trump Accounts are raising understandable questions, especially for parents, grandparents, business owners, and anyone who wants to help the next generation build a stronger financial future.
For many people, the first question is simple: Is this something we should use? A better question may be: Could this be one practical way to invest in a child’s future and create momentum that lasts for decades?
That is part of what makes this so compelling. This is not just a conversation for affluent families. This is a conversation about access, generosity, and long-term opportunity. When children have even a small account in their name, with time to grow, it can create more than a balance. It can create ownership, possibility, and a sense that their future matters. That is one reason people across the country are paying attention.
And some families and business leaders are already thinking about this in a big way. In December 2025, Michael and Susan Dell pledged $6.25 billion to help encourage families to open these accounts. Their commitment is expected to provide $250 for 25 million American children age 10 and under who live in ZIP codes with a median family income of $150,000 or less and who will not receive the federal $1,000 seed contribution. Associated Press reporting said the structure allows support to be directed toward children in qualifying ZIP codes, which shows how this framework could become a practical tool for generosity, not just personal planning.
That is what makes this worth talking about. Over the next 20 years or more, even modest contributions could compound into something meaningful. Parents may use these accounts for their own children. Grandparents may want to help grandchildren get started. Business owners may see this as a way to support employees and their families. Donors and philanthropically minded families may also see the bigger picture: helping children participate in long-term investing, including broad U.S. stock market exposure through index-based mutual funds and ETFs.
What are the new Trump Accounts?
Trump Accounts are not political-themed investment vehicles, and they are not built around a particular ideology or market view. They are a statutory savings account for children, structured as a special form of traditional IRA for eligible minors during a defined growth period. The IRS says that after that growth period ends, the account generally transitions into normal traditional IRA treatment.
That matters because this is not just another headline or trend. It is a real planning tool, and for many families, it may be one small but meaningful way to help a child begin participating in long-term investing early in life.
Why are people paying attention to these accounts?
One major reason is the one-time $1,000 federal government pilot contribution for eligible children. IRS guidance states that this pilot contribution is available for eligible children born between January 1, 2025, and December 31, 2028, provided the required election is made and the child is a U.S. citizen with a valid Social Security number.
But beyond the federal seed money, people are paying attention because this opens the door to a bigger conversation. Families can use these accounts to start building. Grandparents can use them to give with purpose. Employers may be able to help employees’ children. And larger donors can even think in terms of broader community impact, as the Dell example shows. (AP News)
How do you open a Trump Account?
The IRS says an authorized individual must open the initial account using Form 4547, Trump Account Election(s), or through the related online filing process when available. The election generally must be made by December 31 of the calendar year in which the child turns 17. (IRS)
So yes, there is a process. But the bigger opportunity is not just filling out paperwork. It is thinking intentionally about whether this is a good fit for your child, grandchild, family, or giving goals.
When can these accounts actually be funded?
This is one of the biggest practical questions. The IRS has said that Trump Accounts cannot be funded before July 4, 2026, and that the one-time government contribution also cannot be deposited before that date. (IRS)
That means families can prepare and learn the rules now, but actual funding follows the statutory start date. (IRS)
How much can be contributed?
The IRS states that family members, friends, and employers may contribute up to $5,000 per year to a Trump Account during the growth period, with inflation adjustments beginning after 2027. Within that overall contribution limit, employers may contribute up to $2,500 per year to an employee’s or employee’s dependent’s account without the contribution being treated as taxable income to the employee, and those employer contributions are generally deductible as a business expense subject to the broader rules. (IRS)
That may not sound huge at first glance, but over a long timeline, early dollars matter. And that is really the heart of this opportunity. A child does not need a massive balance on day one for this to matter. Sometimes generosity starts with giving a child a beginning.
What makes these accounts different from a 529 or custodial account?
Trump Accounts are different because they are neither primarily educational nor simple custodial brokerage accounts. During the growth period, they operate under a special IRA framework with restrictions on withdrawals and investment choices. After that period ends, traditional IRA rules generally take over. (IRS) The proposed rule defines a beneficiary’s “growth period” as the period from the account’s opening through December 31 of the year the child turns 17, essentially covering the years before they reach age 18, for simplicity and reference.
That means they may complement other planning tools, but they do not cleanly replace them. A 529 plan may still make more sense when education is the main priority. A custodial account may still offer more flexibility. A trust may still be appropriate when control and long-term family structure matter. But a Trump Account may still be a helpful piece of the puzzle, especially when the goal is simply to help a child get started.
What can the money be invested in?
During the growth period, the investment menu is limited. IRS guidance says the account can generally hold mutual funds or ETFs that track an index of primarily U.S. companies, with broad U.S. stock index exposure as the general model. (IRS)
For families who want simplicity, that may actually be a strength. And from a generational standpoint, there is something powerful about helping children begin participating in long-term equity investing from an early age. That is part of why some people see this as a meaningful legacy and generosity tool.
Can you transfer existing investments into a Trump Account?
No. Only cash contributions can be made. These accounts are not intended as a catch-all for an existing child portfolio. IRS guidance focuses on account establishment, contribution rules, limited permitted rollovers, and eventual treatment as a traditional IRA. (IRS)
Are contributions tax-deductible?
No. Individuals who contribute do not get a tax deduction, but businesses that contribute generally may receive a deduction. IRS guidance also says no deduction is allowed for Trump Account contributions during the growth period, and after-tax contributions create basis, while the government pilot contribution and certain other qualified contributions do not create basis. (IRS)
That means the value here is not immediately deductible for most families. The value is the long-term compounding potential, the government seed money for eligible children, and the opportunity to give a child a real financial starting point.
Can the money be used for college or other life expenses?
Not in the same way many people assume. During the growth period, withdrawals are generally very limited. Once that period ends and the account is treated more like a traditional IRA, normal IRA withdrawal rules and exceptions may apply, including possible exceptions for higher education expenses or a first-time home purchase. But this is not the same thing as a purpose-built education account. (IRS)
Who controls the account?
An authorized adult opens and manages the account while the child is still a minor. The child is the beneficiary, and the IRS also allows a successor responsible party to be designated. (IRS)
That is an important planning point for families, grandparents, and anyone thinking about long-term generosity. Giving is not only about how much. It is also about how and when support is provided.
What are the risks or drawbacks?
As with any financial strategy, there are tradeoffs. The annual contribution cap is relatively modest. The investment menu is limited. The child remains the long-term beneficiary. Withdrawals before adulthood are restricted. And the account may not address every family goal.
That does not make the account bad. It just means it needs to be used in the right role. For some families, it may be a practical way to help a child begin. For others, it may sit alongside other tools. For generous donors or business leaders, it may represent a way to support children and communities at scale. (AP News)
Should families use Trump Accounts?
In many cases, the answer may be yes, selectively. If you have an eligible child or grandchild, capturing the $1,000 government contribution could be worthwhile. Adding a modest annual amount for long-term compounding may also make sense. (IRS)
But the bigger opportunity may be thinking beyond your own household. Could grandparents use this as part of their gifting strategy? Could a family business help employees’ children? Could philanthropically minded families support children in underserved communities? The Dell commitment is one example of how this structure can be used not only for personal planning but for meaningful generosity that could echo across the next generation. (AP News)
The bottom line
Trump Accounts are now part of the planning landscape, and they may create real opportunities for many kinds of families. But they are not just about wealth. They are about possibility. They are about helping children begin. They are about what can happen when even a modest amount is invested early and given time to grow.
For some families, the best use of a Trump Account may be simple: capture the benefit if it fits, understand the limitations, and use it as one more thoughtful way to support the next generation. For others, it may inspire a broader conversation about generosity, legacy, and how to create opportunity for children who may not otherwise have it.
At Goodwin Investment Advisory, we believe financial decisions are best made with clarity, perspective, and a plan. And sometimes the best planning is not only about protecting what you have built. Sometimes it is about deciding how to pass hope, ownership, and opportunity forward.
Sources:
https://www.texastribune.org/
Associated Press coverage on the Dell commitment
Michael and Susan Dell donate $6.25 billion to encourage families to claim “Trump Accounts”
https://apnews.com/article/
IRS newsroom guidance on Trump Accounts
Treasury, IRS issue guidance on Trump Accounts established under the Working Families Tax Cuts; notice announces upcoming regulations
https://www.irs.gov/newsroom/
IRS instructions for Form 4547
Instructions for Form 4547, Trump Account Election(s)
https://www.irs.gov/
IRS proposed regulations page
Treasury, IRS issue proposed regulations for Trump Accounts contribution pilot program; Treasury Department to deposit $1,000 into the account of each eligible child
https://www.irs.gov/newsroom/
Source note: This article was developed using publicly available guidance from the Internal Revenue Service, including Trump Account program guidance, Form 4547 instructions, and proposed regulations, as well as Associated Press reporting on the Michael and Susan Dell family’s announced commitment related to eligible children’s accounts. It also reflects internal draft content provided to Goodwin Investment Advisory for educational and editorial purposes.
Disclosure – All investment carries risk, and we cannot guarantee performance or results. Past performance does not guarantee future results. These insights, blogs and
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