By Betsy Klein, CNN
(CNN) — After President Donald Trump unveiled his signature Trump Accounts earlier this year, child welfare advocates realized it would be challenging, if not impossible, for one eligible group of children to access the IRA-style savings accounts.
The accounts must be opened by an “authorized individual,” who is most typically a parent or other family member named as a legal guardian. But it wasn’t clear what that might mean for children in foster care who may have a rotating cast of legal guardians.
“Foster youth would have been left out. What would it have meant if you come into care? Who’s your custodian? Who signs up? Who is going to open the account for you? What does it look like if you go back home?” said Sixto Cancel, the founder and CEO of child welfare advocacy group Think of Us.
Cancel raised the issue with the office of first lady Melania Trump, who in her second term has used her platform, in part, to shine a spotlight on children in the foster care system, working on legislative and other efforts to support a long-marginalized group.
Immediately, Cancel said, Trump’s office “jumped into action” and “responded with ‘how can they help?’ and pulling people together.”
On Thursday, after months of coordination between her office, state governments and the Treasury Department, the first lady formally unveiled “Fostering the Future Accounts,” offering updated guidance that allows state child welfare agencies and foster youth representatives to set up the accounts for children in foster care.
Trump, who typically keeps a low public profile, appeared at the Treasury Department to make the announcement alongside Treasury Secretary Scott Bessent.
Approximately 400,000 American youth live in foster care, according to the US Department of Education.
One in five of those children, Bessent said on Thursday, could experience homelessness as they age out of the system, and only half “obtain gainful employment by the time they turn 24.”
The accounts, which officially launch July 4, are open to any child who is a US citizen with a valid Social Security number. For the regular Trump Accounts, children born between January 1, 2025, and December 31, 2028, may receive a one-time, $1,000 pilot contribution from the federal government.
But child welfare agencies cannot receive that $1,000 pilot contribution for children in foster care. Instead, a parent or foster parent can elect to have the child’s account receive that contribution if they anticipate the child will be their “qualifying child,” according to the Internal Revenue Service. States can also deposit federal survivor benefits into these accounts, along with unobligated Temporary Assistance for Needy Families funds.
When they turn 18 years old, the first lady said in her Thursday remarks, those children will be able to access the money in the account. She called it a “first step toward personal independence.”
So far, 23 states — all with Republican governors — have opted in to the program, with efforts from advocacy groups and the office of the first lady underway to get the remaining states on board, according to Melania Trump’s office. The Treasury Department is providing extra guidance and support to the state welfare agencies on how to maximize the benefit, Bessent said.
For Cancel, who was once part of the foster care system himself, Thursday’s announcement marks an important step that could serve as a lifeline.
“To have that as a high schooler — to think, ‘I can use that to get an apartment’ — brings you a peace of mind that is unexplainable,” he said.
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