Key Questions: How Do Recent New Rules Affect Trump Accounts?

Post-September 30, an eligible child may have a Trump Account even if a parent or guardian did not elect to have one established. The Secretary of the Treasury automatically made the election and established an initial Trump Account referred to as an “auto account” for all eligible children.¹ There is no longer a need for any election to establish a Trump Account by any person other than the Secretary. Parents still need to formally claim the auto account in order to activate it, manage the account, and to allow family members, friends, and employers to contribute. And if their child is eligible for the $1,000 pilot contribution, they also will need to elect for this separately. Note that there is no express parental opt-out from the automatic account creation.

The benefit of automatic enrollment is that this allows eligible children to begin receiving qualifying philanthropic contributions without first requiring a parent or guardian to open an account.

How the Auto Account Works

Although a parent or another authorized person ordinarily acts as the responsible party for a child’s Trump Account, Treasury is the responsible party for an auto account and is deemed to have activated it. Account records are maintained separately for each child. Contributions are received and recorded by the individual auto account, while investments are held collectively through a master group trust. Each auto account holds an undivided proportionate beneficial interest in the investment held in the master group trust that is attributable to contributions allocated to qualified classes of which the account beneficiary was a member and the $1,000 pilot program contribution (if an election was made). This structure combines separate account ownership and account-level recordkeeping with collective investment and administration. The funds are initially invested in the default fund the State Street SPDR Portfolio S&P 500 ETF (SPYM).

If a parent elected to establish a Trump Account before October 1, 2026, but did not complete the required activation by September 30, the account established under that election will be an auto account. Once automatic enrollment begins, initial accounts established through account-opening elections will also be auto accounts, even when a parent makes the election.

How to Claim an Auto Account

You’ll need to go through the account-claiming process in the Trump Accounts app or on the Trump Accounts web portal. As part of claiming, you’ll need to verify your identity. This step confirms you’re who you say you are before you’re given access to your child’s account. You’ll be asked a few additional questions to confirm your legal authority to claim the account, such as your relationship to the child as their parent or legal guardian. This establishes that you’re the appropriate person to take on the responsible party role. Once you’ve completed the claim process, you’ll need to activate the account pursuant to instructions from BNY Mellon (the initial trustee) and have full management access to the account. 

How to Claim the $1,000 Pilot Contribution for an Auto Account

If the child is eligible for the $1,000 pilot contribution, the parent or guardian must make a separate pilot election for the child through the Trump Accounts app or on the Trump Accounts web portal. Treasury cannot make the election for a child to receive the $1,000 pilot contribution. 

Auto Account Acceptance of Qualified General Contributions

An auto account can receive qualified general contributions, including qualified stock contributions. It cannot receive individual or employer contributions. There is nothing that needs to be done to receive these qualified general contributions (the $1,000 pilot contribution is a separate contribution). A parent/guardian doesn’t even have to activate the account.

How to Accept Individual or Employer Contributions

An auto account cannot receive individual or employer contributions. A child’s guardian or legal custodian must first claim the auto account by submitting a claim through Treasury’s electronic application or web page, following the prescribed instructions. A receiving Trump Account must be established and activated for the same child. Then, the auto account can be rolled over to the receiving Trump Account via a trustee-to-trustee transfer, and the auto account is closed.

Unclaimed Auto Accounts

A family may decline to claim an auto account. However, an auto account could still be funded with the $1,000 pilot contribution or qualified general contributions from eligible government or charitable donors. In this case, the funds remain invested, whether or not the account has been claimed. When the child turns 18, it converts to a traditional IRA in their name. The child can then claim the account on their own. If the child doesn’t claim the account, the child’s estate would be the beneficiary of the auto account.   

Auto Account Summary:

• If no election by a parent for an eligible child has been made yet, an auto account is established by the Treasury to make an election for an eligible child.
• If an election was made by a parent or guardian for an eligible child, but they failed to activate the account by September 30, initial accounts established will also be auto accounts.
• Post September 30, initial accounts established through account-opening elections by a parent will also be auto accounts.
• Auto accounts can receive the $1,000 pilot contribution. But, a valid pilot-program election must be made in order to receive the contribution. The auto account establishment alone does not trigger the pilot contribution.
• Auto accounts can receive qualified general contributions from eligible government or charitable donors.
• Auto accounts cannot accept individual or employer contributions (must establish a separate account to accept these contributions).
• Auto accounts can be rolled over into a receiving Trump Account that can receive individual or employer contributions.
• Auto accounts can remain unfunded with individual or employer contributions.
• Auto accounts can remain unclaimed. When the child turns 18, they can claim the account (now a treated as traditional IRA but still a Trump Account.) Alternatively, if the account is not claimed, the child’s estate would be the beneficiary.
• Account records are maintained separately for each child, while investments are held collectively through a master group trust.
   

Post October 1, 2026 — The Three Methods to Establish a Trump Account

With the revised rules in play, there are now three methods by which a Trump Account can be established:

1. Auto account established by the U.S. Treasury as an authorized person.
2. Establishment of an initial Trump Account via election by an authorized person other than the Secretary of the U.S. Treasury by using Form 4547, Trump Account Election(s) or the electronic application via your IRS online account for individuals (ID.me account) or through the Trump Accounts web portal. (This method is probably only used in rare circumstances now.)
3. Establishment of a claimed initial Trump Account to receive the funds from an auto account. This account is an entirely separate account from the auto account.

Qualified Stock Contributions Overview

The pledged contribution from the Michael and Susan Dell Foundation (MSDF) is an example of a class contribution. However, this contribution was made in cash. The Treasury Department and the IRS have been informed that several eligible donors who would not otherwise make cash contributions are prepared to facilitate contributions of appreciated stock similar to the general funding contribution of the MSDF. Therefore, to sustain participation, the federal government wants to facilitate private contributions for the benefit of individual American children. The temporary regulations allow eligible donors to make a general funding contribution using stock of publicly traded domestic corporations.

In essence, an eligible donor, generally a 501(c)(3) tax-exempt charitable organization, can contribute qualified stock to the Treasury Department in accordance with a Treasury acceptance agreement, and those contributions are made in equal amounts to a qualified class of account beneficiaries that are in the growth period.

Qualified stock is stock that is publicly traded, issued by a domestic corporation, and not subject to any pre-existing transfer restrictions. During the growth period, funds in a Trump account may only be invested in eligible investments. Holding qualified stock received pursuant to a qualified stock contribution does not violate this restriction, because no funds in the account were used to acquire the contributed stock. Rather, the stock is contributed directly to the individual Trump accounts for the beneficiaries in the designated qualified class.

This is intended to create a practical pathway for large-scale private giving to support the Trump account program. This is not for your average taxpayer to donate a few shares of publicly traded stock to a Trump account for your own child.

More guidance is needed for donors and trustees before a donor makes a stock contribution and a trustee accepts the contribution.

Key Takeaway

The updated rules are intended to expand access to Trump Accounts by establishing auto accounts for eligible children and allowing certain eligible donors to make qualified stock contributions. However, automatic account creation does not eliminate every required step: parents or guardians generally must still claim the account to manage it and permit individual or employer contributions, and they must make a separate election for an eligible child to receive the $1,000 pilot contribution.

Families should review the available claiming and election procedures and consider how the account may fit within their broader saving and planning goals. Because implementation details may continue to evolve, families, donors, and trustees should monitor future Treasury and IRS guidance before taking action.

For more information, please contact your advisor.