If you have children under 18, you now have three tax-advantaged places to put money for them, and one of them didn’t exist a year ago. Trump Accounts opened for business on July 4, 2026. For children born between 2025 and 2028, the Treasury will put $1,000 into one — once, free, no strings past filing the election.

Free money deserves attention. But the question we keep hearing around DFW isn’t whether to claim the $1,000. It’s whether this new account should replace the 529 you’ve funded since your daughter was born, or the custodial Roth you opened the summer your son started lifeguarding. The short answer is no, on both counts. All three are worth having, for reasons that come down to taxes and timing.

What a Trump Account Actually Is

Start with the part the name hides: a Trump Account is a traditional IRA. The law signed on July 4, 2025 created it as a new flavor of the same account your 401(k) rolls into, and the statute says it gets treated like any other traditional IRA except where a rule specifically carves out something different.

• The $1,000. U.S. citizen children born between January 1, 2025 and December 31, 2028 qualify for a one-time contribution from the Treasury. A parent claims it by filing Form 4547 or making the election at trumpaccounts.gov, and only one funded account per child is allowed.
• What you can add. Up to $5,000 a year total, counting every relative and family friend who chips in, indexed for inflation after 2027. An employer can add another $2,500 a year on top, and it isn’t taxable income to you.
• How it gets invested. By law, one kind of choice: a mutual fund or ETF tracking a broad index of U.S. companies, no leverage, annual fees no higher than 0.10%. That restriction runs through the end of the year when the child turns 17.
• When the money can come out. Not before the year when the child turns 18. After that, ordinary IRA rules take over: withdraw before 59½ and the taxable share is ordinary income plus a 10% additional penalty, unless an exception applies. Qualified higher education expenses and the first $10,000 toward a first home are two of them.
• Which dollars get taxed. Your contributions aren’t deductible going in, so those dollars come back out untaxed. The $1,000 seed, any employer money, and all the growth get no such treatment — every dollar of it is ordinary income when withdrawn.

So, it’s a retirement account in kid clothes. That’s not criticism. It’s the fact that decides which of the three gets funded first.

The Two You Already Know

A 529 plan is the education specialist, and it got better this year. Growth is tax-free and so are withdrawals for qualified education costs — the only one of the three that can say both. Starting in 2026 you can take up to $20,000 per child per year for K-12, double the old limit, and what counts now reaches past tuition to curriculum materials, books, online materials, tutoring, standardized test fees, dual enrollment, and educational therapies for students with disabilities. Trade licenses, certification exams, and the continuing education required to keep a credential also qualify, which matters in a metroplex where plenty of well-paid work runs through a certificate rather than a diploma.

A custodial Roth IRA is the child’s own Roth, opened and managed by a parent. One hard gate: the child needs earned income, and the contribution is capped at the lesser of what they earned or $7,500 for 2026. A ten-year-old with an allowance isn’t eligible. A sixteen-year-old with a summer paycheck is, and that paycheck buys the best tax treatment available to anyone — decades of tax-free growth, with contributions withdrawable at any time, tax-free and penalty-free.

Three Accounts, Side by Side

The Question	Trump Account	529 Plan	Custodial Roth IRA
What does it take to open one?	Child under 18 with a Social Security number	Anyone, any age, no income test	The child must have earned income
How much per year (2026)?	$5,000 from family, plus $2,500 from an employer	No federal cap; $19,000 per donor, or $95,000 with the 5-year election	The lesser of the child’s earnings or $7,500
How is the growth taxed?	Deferred, then ordinary income on the way out	Tax-free if used for education	Tax-free, permanently
What can it pay for?	Anything, once the child turns 18	Education, K-12 through credentials and graduate school	Anything
When can it be touched?	Not until the year the child turns 18	Any time there’s a qualified expense	Contributions any time; earnings at 59½
Who owns it at the end?	The child	You — the owner never changes	The child, at 18 in Texas
How does the FAFSA see it?	Not an asset, but withdrawals count as income	Parent’s asset, assessed at up to 5.64 percent	Not an asset, but withdrawals count as income

That last row is the one people miss. Retirement accounts stay off the FAFSA as assets, which sounds like a clean win over the 529. But the form still asks about the untaxed portion of IRA distributions, and the formula treats income far more harshly than assets: a parent’s 529 is assessed at a maximum of 5.64 percent of its value, while income runs up a schedule reaching 47 percent. Taking retirement money out to pay tuition can cost more aid than the 529 would have.

Where Each One Wins

Three accounts, three jobs. The decision rules are cleaner than the rulebook suggests:

• Claim the $1,000 if your child is eligible, whatever else you decide. One election on a federal form, for a $1,000 deposit your family didn’t have to fund. The birth window closes December 31, 2028, and the seed compounds for eighteen years before the child can touch it. There’s no case for leaving it on the table.
• Use a 529 for money you intend to spend on education. It’s the only one of the three where growth and withdrawal are both tax-free, and education is now defined broadly enough to cover a private grade school, a state university, a welding certificate, and the exam fee to renew a license twenty years from now.
• Open a custodial Roth the first summer there’s a real paycheck. Tax-free forever beats tax-deferred, and a dollar contributed at sixteen has half a century to work. Many families match the child’s earnings, so the teenager keeps their paycheck, and the account still gets funded.
• Fund a Trump Account past the $1,000 only after the other two are handled. Every dollar of growth in the account eventually comes out as ordinary income, which is the worst of the three tax outcomes. It earns its place when the 529 is already funded to target and the child has no earned income to support a Roth.
• Let an employer’s offer change the order. The $2,500 an employer can contribute is outside your $5,000 cap and outside your taxable income. If your benefits menu includes it, take it before funding the account yourself.

A Simplified Illustration

Take a Colleyville family with $5,000 a year to set aside for a newborn and assume 6 percent a year net of costs for eighteen years. Either way they contribute $90,000 and the balance reaches roughly $155,000 on the child’s eighteenth birthday. The only thing that differs is which account held it.

• In a 529. The tuition bills get paid out of the full $155,000, with no federal tax on any of it.
• In a Trump Account. The $90,000 the family put in comes back untaxed. Roughly $65,000 of growth — plus the $1,000 seed and what it earned — is ordinary income in the year it’s withdrawn. The higher education exception waives the 10 percent additional tax; it doesn’t waive the income tax. At a 24 percent rate, that’s about $16,200.
• In a Trump Account, if the child is still in school. A full-time student under 24 can have that income taxed at the parents’ rate rather than their own, so the rate that applies may be the household’s top bracket.

Same money in, same return, same day, and about $16,200 of difference. (PLEASE NOTE: This example is hypothetical and for illustrative purposes only; it assumes a constant 6 percent net return, level contributions, a single withdrawal, and one tax rate, none of which any real situation guarantees. Results depend on markets, costs, withdrawal timing, and the brackets in effect that year — investments can and do lose value.)

Key Considerations and Risks

Much of this has been written in the last fourteen months, and one of the accounts is still being built.

• The Trump Account rulebook isn’t finished. Treasury and the IRS issued proposed regulations on employer contributions August 11, 2026 and on eligible investments August 20, 2026. Comments run through October 20, with a public hearing on the employer rules on October 15. Operational details — rollovers to an outside custodian among them — can still move.
• A custodial account is the child’s account. In Texas the age of majority is 18, and on that birthday the custodian’s authority ends. Your teenager can put the balance toward a down payment or a lifted truck, and the law doesn’t distinguish. Fund one only if you’re at peace with that.
• Earned income must be actual earned income. Paying your child through your business is a legitimate way to fund a custodial Roth. It requires real work, a defensible wage for it, and payroll records to prove both. An entry in a spreadsheet at year-end isn’t a job.
• 529 money that never reaches a classroom costs less than it used to. A non-qualified withdrawal means income tax plus a 10 percent penalty on the earnings. But you can change the beneficiary to another family member, and up to $35,000 can move into the beneficiary’s Roth IRA once the account has been open 15 years, subject to the annual Roth limit and their earned income.
• Texas gives you no in-state deduction to chase. States with an income tax often reward residents for using the home plan. Texas doesn’t, so a Texas family can shop every 529 in the country — including the one Texas sponsors — on cost and fund lineup alone.
• Mills Wealth Advisors is not a tax advisor. Which account gets funded first depends on your bracket, your business structure, and your child’s earnings. Those are questions for your CPA, and we’re glad to be in the conversation.

Where It Fits in a Wealth Strategy

None of this requires a market call. It’s sequencing, and most families can settle it in an afternoon:

• If a child in your house was born in 2025 or later, file the election and claim the $1,000.
• Decide how much of your saving is truly earmarked for education. That number belongs in a 529.
• Check whether your child had a W-2 this year. If so, fund a custodial Roth up to what they earned, before the tax filing deadline.
• Ask your benefits department whether the company contributes to Trump Accounts. It costs one email and it’s worth $2,500 a year.
• Write down what the money is actually for. A college fund, a first-house fund, and a “start-them-early” retirement fund are three different goals, and the winner depends on which one you’re answering.

The Bottom Line

The key distinction is tax treatment: a 529 offers tax-free education funding, a custodial Roth can grow tax-free for life, and a Trump Account is tax-deferred, so its growth is taxed later as ordinary income. That difference alone should guide your decision.

Disclosure: This material is provided for informational and educational purposes only and does not constitute tax, legal, or personalized investment advice. Mills Wealth Advisors is not a tax or legal advisor. Trump Account rules were enacted in 2025 and remain subject to proposed regulations and further guidance; contribution limits, tax treatment, education expense definitions, and financial aid formulas change over time and depend on individual circumstances. Figures cited reflect published amounts as of September 2026 and should be confirmed with your tax advisor before you act. Investing involves risk, including the possible loss of principal. Past performance is not a guarantee of future results.