This author attended the Florida Bar Real Property Probate and Trust Law (“RPPTL”) committee meeting of the Individual Retirement Benefits and Insurance Committee and learned more about the free $1,000 available to you, your client’s children and grandchildren beginning in July 4, 2026.
In the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025 a new account called the Trump Account was created effective July 4, 2026. The Federal government will make a one time contribution of $1,000 to any child born between January 1, 2025 and December 31, 2028. Think babies….A parent or any other person can then contribute to a Trump account BEFORE the child turns age 18 even though the child did not qualify for the initial $1,000 “free” money. Some of the requirements are as follows:
- Total contributions by the parent cannot exceed $5,000
- No deductions for these contributions
- Child does not have to have compensation
- Contributions and earnings can not be withdrawn before the child turns 18
- Distributions after age 18 follow the IRA distributions rules… income taxable and 10% penalty if under age 59 ½
- Contributions must be invested in low cost mutual funds or exchange traded funds that track the S&P 500 stock index
- Contributions do not count toward IRA or work contribution limits.
ADVICE: Keep this on your radar for 2026. All clients with young babies or grandchildren should take advantage of this. It appears that these accounts will also be exempt from creditors under Florida law also. Under this law the child can withdraw the money at age 18 but hopefully if advised properly (or “coerced” properly 😊) they will not spend it. From some very basic calculations, if that $1,000 was invested it could result in $15,000 to $300,000 in 60 years… not bad for “free” money.
