Trump accounts: The details advisors need to know

Core Insights - The Trump administration is introducing "Trump accounts" aimed at helping children save for the future, with details released by Treasury Secretary Scott Bessent [1][5] Group 1: Account Setup and Management - Trump accounts can be opened during tax filing using Form 4547 or through the website trumpaccounts.gov, with a draft of the form already available for public review [2] - Each child can have only one account, which is owned by the child but managed by a qualified guardian or family member [3] - Accounts can be opened for eligible children starting with 2025 tax filings or via the online portal launching in summer 2026 [3] Group 2: Account Functionality and Benefits - Upon reaching 18, the account operates like a traditional IRA, allowing for tax-advantaged withdrawals for education or home purchases, while other withdrawals may incur a 10% penalty [4] - Children born between 2025 and 2028 will receive a $1,000 federal grant that does not count towards the $5,000 annual contribution limit, with accounts available for any minor [5] Group 3: Industry Response and Additional Contributions - Companies like BNY Mellon and BlackRock are matching the federal grant for their employees' children, while philanthropists like Michael Dell and Ray Dalio have made personal contributions [7] - 20 states are considering additional contributions that would not affect the annual limit, potentially linked to financial literacy courses [8]