Special Trivia Question for 12/30/2025 (Trump Accounts)

If the child on a Trump account should pass away after turning 18, the account is treated similar to an inherited IRA. In most cases, it means the designated beneficiary must take Required Minimum Distributions and empty the account within ten years.

If the child were to unfortunately pass away before age 18, the entire account is treated as taxable income to the beneficiary in the year of death. In this respect, the inheritance rules are similar to which type of account?

A. Roth IRA
B. 529
C. 401k
D. HSA

Health savings accounts (HSAs) are possibly the least beneficial accounts to inherit. When the owner passes away, the account ceases to be an HSA, and the beneficiary (unless it is the decedent’s spouse) is taxed on the entire value in the year of death.

No tax is due to the beneficiary when a Roth IRA is inherited. If a 529 account owner passes away, it can be transferred to a successor owner without tax consequences. If you inherit a 401k (or IRA), and you are not the deceased person’s spouse, must take Required Minimum Distributions and empty the account within ten years (similar to inheriting a Trump account after the original beneficiary turns 18).