IRS, Treasury proposal would auto-create an estimated 63.36 million 530A accounts

The IRS issued draft regulations Tuesday that would let the Secretary of the Treasury open an initial Trump Account, or 530A account, for an eligible child without a parent, guardian, or other adult submitting an enrollment election. Treasury estimates the process would create 63.36 million accounts that qualifying U.S. children could later claim, and it anticipates that automatic creation turns the program into a near-universal child savings and investment program. The rules replace regulations proposed in March and govern tax-advantaged investment accounts for qualifying children under 18; opening one can be done by the secretary or by a parent or guardian.

For advisors, the default is the thing to price. If the estimate holds, next-generation planning starts from an account already opened in a child's name rather than from a funding decision a family sits down to make. The law that created Trump Accounts included a pilot program providing a one-time $1,000 federal deposit to such accounts; the coverage does not spell out the window in which a child must be born to receive it.

Claiming an automatically created account is a separate act, and one that may not happen for years. A parent, guardian, or beneficiary would have to authenticate their identity to Treasury, and the proposal is examining how accounts that are never claimed could be disclaimed — which suggests an unclaimed account could sit until a family member files for it.

The portfolio side is the least settled. Treasury would maintain account-level records and pool assets for investment through a master group trust, with individual ownership records kept separate. In July it shared four exchange-traded funds as preliminary default investment options, after industry advocates asked that the choices be diversified.

Eligibility data is the largest blank. According to PLANADVISER's report, the regulations did not clarify which data Treasury or the IRS would use to determine who qualifies, and they left "qualified general contributions" and "qualified stock contributions" undefined. The draft does float letting "eligible donors" contribute to accounts created in specific ZIP-code-based geographic areas, including areas with a median household income below the threshold income for highly compensated employees. A narrower provision would let a beneficiary roll an account into an ABLE account at 17, a savings vehicle previously offered only to people with disabilities; otherwise beneficiaries still reach the accounts at 18.

Until Treasury names the eligibility dataset, an advisor can hold a placeholder in a client file but not a balance.