If a child dies before the year they turn 18, their Trump Account (530A) stops being a Trump Account – and stops being an IRA – on the date of death, per IRS Notice 2025-68. The account is treated as if everything in it were paid out that day, and the person who inherits it includes the value, minus the after-tax money that went in, in their own income.
It is a hard question, and families do ask it. Here is what the federal rules say, and where they are silent.
During the growth period: the account ends on the date of death
The growth period runs through December 31 of the year the child turns 17, and almost nothing can come out – but per the notice, "a distribution upon the death of the account beneficiary" is one of the few exceptions, alongside rollovers and returns of excess contributions.
Per section 530A(d)(6), as quoted in Notice 2025-68, the account "shall cease to be a Trump account as of the date of death," and its fair market value, "reduced by basis," is included in the gross income of "the person who acquires the account beneficiary's interest in the account." If that person is the child's estate, the amount goes on the child's own final tax return instead, per the notice.
What counts as taxable
The key word is basis. After-tax contributions from parents, grandparents and other family create basis, so that money is not taxed again. Money that went in untaxed has none, per the notice and the statute: the $1,000 federal seed, employer contributions excluded from pay under section 128, and qualified general contributions – the equal deposits Treasury makes to a whole class of children from a government or charitable donor's funds. Investment growth has no basis either.
A simple illustration: an account that received the $1,000 seed and $3,000 from family, and is worth $4,600 on the date of death, has $3,000 of basis. The other $1,600 – the seed plus the growth – is taxable income to whoever inherits the account. Neither the notice nor the September regulations sets a separate rule for the seed.
After the growth period: ordinary IRA rules
From January 1 of the year the account holder turns 18, a Trump Account generally follows the rules for traditional IRAs, as our earlier coverage of the age-18 transition explains – death included. Per Notice 2025-68, if the account holder dies after the growth period, "the rules that apply to other individual retirement arrangements after the death of the account owner apply." In the notice's example, a parent who inherits the account holds an inherited IRA, subject to the usual required minimum distribution rules.
If the account was never claimed
Per Treasury, every eligible child under 18 with a valid Social Security number now has a Trump Account, most through automatic enrollment – and an auto account stays unclaimed until a parent claims it, a step our reporting on claiming an auto account walks through. The temporary regulations published September 30 (TD 10056) cover this case directly.
Per the regulations, the child's estate is the beneficiary of an auto account. If the child dies during the growth period before a funded auto account is claimed, it stops being a Trump Account that day but remains an IRA that can still be claimed. A person authorized under state law to act for the child's estate or property may claim the funds through Treasury's application or web page, and must also show they are entitled to the child's tax information under section 6103. If the auto account holds no money, the trustee closes it once it learns of the death.
Who inherits a claimed account
For an account a parent has already claimed, the regulations describe it as held for the child "and, after the death of the individual, his or her beneficiaries" – without listing who those beneficiaries are. That leaves the account agreement and state law to answer it, and the trustee is the place to ask how a claim is made.
Here a Trump Account differs sharply from a 529 plan. A 529 has an owner, usually a parent, who can name a new beneficiary from the family – our colleagues at SavingForCollege.com explain how changing a 529 beneficiary works. A Trump Account belongs to the child. Per section 530A(e), a rollover can move the balance only to another Trump Account "for that account beneficiary" – not to a sibling's.
If the parent managing the account dies
When it is the parent who dies, the account itself does not change – it still belongs to the child, under the same rules. The question is who manages it. Per Notice 2025-68, the person who made the election for the child – usually a parent – is the account's responsible party, and generally may choose "a successor responsible party for the account," to the extent the account agreement and applicable law allow. Our earlier coverage of divorced and separated parents explains how that role is set.
Treasury asked for comments on whether more guidance is needed for choosing a new responsible party, for example when guardianship changes, and the September regulations say reporting rules will come in future guidance. Until then, a family facing either situation may want to talk with the trustee and with a tax professional or estate attorney who knows the household.