The New Trump Accounts Sound Simple. For Grandparents, They're Not.
A new tax-advantaged savings vehicle for children is making its way into financial conversations — and into grandparents' inboxes. Trump Accounts, created by recent legislation, allow contributions on behalf of minors and come with a $1,000 federal government seed contribution. They're being marketed as a generous way for grandparents to invest in a grandchild's future.
Before you open one, you need to understand how the eligibility rules actually work — because what the IRS proposed regulations say and what the form asks you to sign are not the same thing.
What Is a Trump Account?
Trump Accounts are tax-deferred savings accounts for children, established under new federal legislation. The federal government contributes an initial $1,000, and additional contributions from family members will be permitted starting July 4, 2026. The opportunity to open an account — either through IRS Form 4547 or a dedicated government website — has been available for several months.
The accounts follow a single-account-per-child rule. That one detail matters for everything that follows.
Why Grandparents Are Running Into Problems
The IRS proposed regulations establish a clear hierarchy for who can legally open a Trump Account on behalf of a child. Grandparents are last in that line — behind legal guardians, parents, and adult siblings.
Here's how that plays out in practice:
1. If the grandchild was born on or after January 1, 2025: A grandparent can claim the $1,000 federal contribution and open the account simultaneously — but only if the grandchild is a dependent of the grandparent's.
2. If the grandchild was born before January 1, 2025: A grandparent cannot legally open the account if a legal guardian, parent, or adult sibling is "available" to do so. The IRS regulations don't define what "available" means — and that ambiguity is a serious problem.
Most grandparents opening accounts for grandchildren born before 2025 are doing so for children who have living parents. Under the proposed regulations, that appears to place those grandparents outside the rules — even if they're acting with entirely good intentions.
The Perjury Risk Nobody Is Talking About
This is where the situation becomes more than a procedural inconvenience.
The IRS proposed regulations require that by making the election, a grandparent must represent — under penalty of perjury — that they are authorized to open the account and that no person with higher priority is available to act. That's a legally meaningful declaration.
The problem: Form 4547 and the IRS website don't explicitly surface this representation. The form only asks the grandparent to certify that the information provided is true, correct, and complete. There's no visible warning that by completing it, the grandparent may also be implicitly representing that no parent or legal guardian is available.
If a parent exists and is legally available — and the grandparent didn't realize their signature carried that implication — the legal exposure is real. Whether the election is simply invalid, or whether perjury has technically been committed, is a question the IRS hasn't answered yet. That uncertainty alone should give any grandparent pause.
The Coordinated Planning Question
Even setting aside the eligibility and perjury issues, Trump Accounts raise the same question that any new financial vehicle should: where does this fit in the larger plan?
Tax-deferred accounts for minors have implications for financial aid, future withdrawal taxation, custodial control, and how the asset interacts with your own estate plan. Whether a Trump Account is appropriate for your family — and how to structure contributions if it is — isn't a question that should be answered in isolation from the rest of your financial picture.
At CRA, we evaluate new vehicles like this through the lens of coordinated planning. The question isn't "is this account interesting?" — it's "does this fit your retirement income plan, your tax exposure, and what you want to pass on to the people you care about?"
What To Do Before You Act
Our recommendation right now is simple: wait for IRS guidance before opening a Trump Account as a grandparent, unless your grandchild is a dependent and was born after January 1, 2025. The eligibility rules are unsettled, the perjury risk is not theoretical, and there's no urgency that justifies acting ahead of clarity.
If you're a current CRA client and want to understand how Trump Accounts might fit your legacy and tax planning, bring it up at your next review. If you're not yet working with CRA, our 20-Minute Due-Diligence Call is a good place to think through whether your current plan has the kind of coordinated structure these decisions require.