Completed, and Unprotected.

Read quickly, it sounds like relief. Read carefully — the way one is obliged to read a revenue procedure that turns on five conjunctive conditions — it is something narrower and more interesting: an administrative accommodation for small donors, drafted so precisely that it excludes, by design, virtually every client who does any planning at all. And buried inside it is a lesson that has nothing to do with tax and everything to do with the subject of this column: the difference between a transfer that is complete and a transfer that is protected. The government has now confirmed, for a limited population, that these contributions are the first. It has said nothing whatever to suggest they are the second.

Begin with the instrument, because most of the commentary has skipped it.

Section 70204 of Public Law 119-21 — the One, Big, Beautiful Bill Act, enacted July 4, 2025 — added §530A to the Code. A Trump account is not a trust, not a 529 plan, and not a custodial account in the familiar sense. It is, in the revenue procedure’s own words, “a type of traditional individual retirement account (IRA) that is established under section 530A for the exclusive benefit of an eligible individual” — a child who has not reached 18 in the year the account is opened and who has a Social Security number. The child is the owner of the account and is called the account beneficiary.

That single sentence carries most of the planning consequences.

During what the statute calls the growth period — the years before January 1 of the year the child turns 18 — the account is subject to special rules, the most significant being a bar on distributions. With narrow exceptions (qualified rollovers, a qualified ABLE rollover, returns of excess contributions, and distributions on the beneficiary’s death), no distributions may be made from a Trump account during the growth period, and so, as the revenue procedure puts it, the account beneficiary “generally does not have access to amounts in the Trump account during the growth period.” Contributions during that period are capped at $5,000 a year, indexed after 2027, with the separate $1,000 federal pilot contribution and certain nonprofit and governmental contributions sitting outside the cap.

Treasury reports that, as of June 4, 2026, nearly six million elections to open a Trump account had been received.

The gift tax reaches any transfer of property by gift, direct or indirect, in trust or otherwise (I.R.C. §§2501, 2511(a)). Putting cash into an account that another person owns is a gift. That much was never in doubt.

The doubt was about the annual exclusion. Section 2503(b) lets a donor exclude gifts to each recipient up to an indexed amount — $19,000 in 2026 — but only if the gift is not a gift of a future interest in property. And a future interest is precisely what the growth period looks like: the child owns the account but cannot touch it, in some cases for eighteen years. Gifts of future interests get no annual exclusion and must be reported on a Form 709 regardless of size (I.R.C. §§2503(b), 6019).

Do the arithmetic Treasury did. Roughly 300,000 gift tax returns were filed in fiscal 2025. Six million Trump accounts, funded by parents and grandparents who will never owe a dollar of transfer tax against a $15 million exclusion, would have driven that number “from roughly 300,000 to several million.” The Service, sensibly, declined to build that filing cabinet.

So it wrote a safe harbor. Note what it is not: it is not a holding that a Trump account contribution is a present interest as a matter of law. Treasury never resolved the future-interest question. It routed around it, “in the interest of sound tax administration,” for taxpayers who fall within a carefully drawn scope.

To qualify for a given calendar year, all of the following must be true. The taxpayer must be an individual. The only taxable gifts made all year must be cash contributions to Trump accounts, made before the year the beneficiary turns 18. Total gifts to each such beneficiary — Trump account contributions plus everything else given to that child — must not exceed the $19,000 annual exclusion. The contributions must generate no gift or GST liability after applying the donor’s remaining exclusion. And, disregarding the Trump account contributions themselves, no gift tax return may be required or in fact filed for that year, by or for the taxpayer, for any purpose whatever — GST, portability, or otherwise (Rev. Proc. 2026-25, §4.02).

Sit with that last condition. It is the whole architecture of the thing.

A grandparent who funds a Trump account with $5,000 and gives that same grandchild nothing else is squarely inside. A client who funds the same $5,000 and, in the same calendar year, makes a Crummey gift to an irrevocable trust, allocates GST exemption to a dynasty trust, elects to split gifts with a spouse, or files a 709 for any other reason at all is squarely outside — not because the contribution is different, but because he filed. The safe harbor is available only to the donor who has nothing else to report.

The revenue procedure’s own example makes the consequence explicit, and it is worth stating plainly because the drafting is unforgiving. A donor contributes $5,000 to each of three Trump accounts; that is fine. But if he also gives one of those children $14,500 in cash — pushing that child’s total to $19,500, past the exclusion — then the safe harbor fails for the whole year, he must file a return reporting all of his 2026 gifts, “and must report the Trump account contributions to A, B, and C as gifts of future interests” (Rev. Proc. 2026-25, §6).

All three of them. One extra gift to one child, and every Trump account contribution he made that year reverts to future-interest treatment — no annual exclusion, reportable, eating into lifetime exclusion. The default, outside the safe harbor, is the harsher characterization.

For the families we work with, the practical translation is short: if you file a Form 709, this revenue procedure does not apply to you. Clients who fund trusts, allocate GST exemption, or split gifts file every year. They are, by construction, outside the scope of the only pronouncement Treasury has made on the subject — and the underlying question, whether a §530A contribution locked up for eighteen years is a present interest, remains open for exactly the people most likely to care about the answer.

Now set the tax aside, because the durable lesson here is not a filing lesson.

Notice what the government had to say in order to give even small donors an annual exclusion. It had to say the contribution is a completed gift. Completed — meaning the donor has parted with dominion and control, and the money is now the child’s, not his. That is the price of the exclusion, and it is not a technicality. It is the same price the law has always charged for every kind of protection worth having.

We say it in this column so often that it risks sounding like a slogan, so let it be said in the government’s language instead: a transfer that the transferor can undo is not a transfer. A revocable trust is reachable by the settlor’s creditors precisely because the settlor kept the switch. A “gift” over which the donor retains dominion is an incomplete gift for transfer tax purposes for precisely the same reason. Tax completeness and creditor remoteness are two readings of the same fact — that the property genuinely left. The client who wants the benefit of relinquishment without relinquishing is asking the law for something it has never given anyone.

So far, so good. Here is the turn.

A completed gift is not a protected gift. The transfer to a Trump account is as complete as a transfer can be, and it buys the child no protection at all — because the destination is not a trust. It is the child’s own account, in the child’s own name, and it will be the child’s own IRA.

Consider what that means over the life of the gift. The growth-period distribution bar restrains the child, but it is a feature of the account, not a spendthrift clause; there is no trustee holding discretion, no independent fiduciary between the money and the beneficiary, and no protective provision of the sort that keeps a beneficiary’s interest from being alienated or attached. When the growth period ends, the child owns a traditional IRA outright. From there, the money is exposed to whatever the child’s own life produces: a divorce, a judgment, a bad marriage, a bad partner, a bad decade. Retirement accounts do enjoy meaningful creditor protection in bankruptcy and under many state exemption statutes, but that protection is bounded — the bankruptcy exemption for traditional and Roth IRAs is subject to a statutory dollar cap that Congress indexes periodically (11 U.S.C. §522(b)(3)(C), (n)) — and it is protection that belongs to the child, is governed by the child’s domicile, and can be spent, rolled, pledged, or squandered by the child at majority. And the Supreme Court has already held that an IRA passing to the next generation is not “retirement funds” at all for exemption purposes (Clark v. Rameker, 573 U.S. 122 (2014)). Whatever a Trump account is, it is not a structure that survives the beneficiary’s own bad luck.

Compare the alternative every one of our clients already has on the shelf. An irrevocable, discretionary trust, funded early, administered by an independent trustee, holding the same dollars for the same child, gives the beneficiary no interest a creditor can attach, no property a divorcing spouse can characterize, and no corpus the beneficiary can reach and dissipate — because the beneficiary’s interest is a hope in the trustee’s discretion rather than an entitlement. The trust does what the account cannot: it separates benefit from ownership, and keeps them separate for as long as the settlor drafts them apart.

The trade-off is real, and honest planning names it in both directions. Getting an annual exclusion into a discretionary trust is harder than getting it into a Trump account: the present-interest problem Treasury solved by fiat for small donors must be solved in a trust by drafting — a withdrawal right of the Crummey kind, or a §2503(c) minor’s trust — and the GST annual exclusion is harder still, because for transfers in trust it demands a single-beneficiary, essentially vested arrangement that a properly discretionary dynasty trust deliberately is not (Crummey v. Commissioner, 397 F.2d 82 (9th Cir. 1968); I.R.C. §§2503(c), 2642(c)). That is not an accident of the Code. It is the Code charging a price for protection: the more the interest is locked away from the beneficiary’s creditors, the less it looks like the present, vested interest the exclusion rewards.

Which is exactly the point. The Trump account is easy to fund because it protects nothing. The trust is harder to fund because it protects a great deal. A client who understands that sentence understands most of what this column exists to teach.

Nothing in the foregoing is an argument against opening a Trump account. For a modest contribution to a child or grandchild — inside the exclusion, in a year with no other reportable gifts — the account is simple, the safe harbor is clean, no return is due, and the money compounds. Take it.

What it is an argument against is mistaking it for planning. The account is a savings vehicle for a child. It is not seasoning, it is not irrevocability with an independent fiduciary, it is not a spendthrift interest, and it does not stand between the child and the child’s future creditors. It is a completed gift to an eighteen-year-old-in-waiting, and on the day the growth period ends, that is exactly what it will be.

And for the clients who file a 709 every year — which, in our practice, is most of them — the safe harbor is not even available. Their Trump account contributions sit outside Rev. Proc. 2026-25 entirely, in the unresolved territory the revenue procedure declined to enter, where the conservative course is to report the contribution and treat it as the future interest it functionally resembles. That is a small annoyance with a large moral: the government wrote a rule for people with nothing else to report, and the whole of our client base was excluded from it by the very fact that they plan.

Every transfer tax question in this area reduces, in the end, to a single one: did the property genuinely leave, and where did it land? Rev. Proc. 2026-25 answers the first half for a narrow class of donors. The second half — where did it land, and what stands guard there — is the half no revenue procedure will ever answer for you.