Musk Plans SpaceX Stock Gifts for Children Under Trump Accounts

A proposed stock donation by Elon Musk could give millions of American children a financial stake in SpaceX next year, but the method used to distribute the shares may limit families' ability to manage the investment. Musk announced the plan on Monday, October 19, 2026, as questions emerged about restrictions governing the federal Trump Account program.

According to PBS News, the pledge could be worth approximately $10.66 billion, based on about 73 million US children under age 18 and SpaceX shares that closed at $146.03 on Friday. Musk has not disclosed the distribution method or the number of shares each child would receive.

The announcement also coincides with SpaceX's second earnings report since its June 2026 initial public offering. CNBC reported that Musk appeared to indicate the shares could be distributed through Trump Accounts, an interpretation reinforced by references to the proposed gift from the White House and Treasury Secretary Scott Bessent.

Musk responded to a social media discussion about the proposal by recommending an alternative distribution method.

"I recommend giving the shares directly to the public." Musk wrote on X.

Musk also indicated that the proposed donation could be the first in a series of similar initiatives.

"This will be the first of many." Musk wrote in his post.

Neither Musk nor representatives for SpaceX, Brad Gerstner, or the Treasury Department provided comments to CNBC about the proposed donation. Gerstner helped develop the Trump Account program, and Musk thanked him for his role in making the initiative possible.

Under temporary Treasury Department regulations, families generally cannot reject stock deposited into a child's Trump Account or sell the shares until the earlier of five years after the contribution or the end of the calendar year in which the beneficiary turns 17. Exceptions apply in limited circumstances, including certain corporate transitions and formal delisting from a national securities exchange.

The restrictions could prevent families from selling shares even if a company encounters financial or legal difficulties. The rules are temporary and remain subject to revision following public comment.

Carolyn Schenck, an attorney and former national fraud counsel at the Internal Revenue Service, said the framework gives donors greater control over donated assets than conventional charitable arrangements typically allow.

"the donor that's dictating the terms of the gift," Schenck said.

Under conventional charitable giving arrangements, recipients or trustees generally retain final authority over how donated assets are managed. The Trump Account regulations instead place specific conditions on gifted stock and its subsequent sale.

Adam Michel, director of tax policy studies at the Cato Institute, said families should have more flexibility when managing their children's investments.

"Giving families more choices and more ability to hold the assets that they think are best for them and their kids' future ... would be a good thing," Michel said.

He argued that the current framework does not provide that flexibility because families cannot choose which asset enters the account or freely sell it during the required holding period.

"But this is not really that, because you have no choice in the asset that is being deposited into your child's account, and then you also have no ability to sell it for the five-year holding period." Michel said.

The regulations also require trustees to replace prematurely sold shares with the same number and class of securities as soon as practicable. Schenck warned that this requirement could expose beneficiaries to additional losses if the share price rises before the replacement purchase.

"as soon as practicable." The Treasury regulations use this phrase to describe the required timing of the replacement purchase.

Schenck said the requirement prioritizes restoring the specific security rather than simply compensating beneficiaries for a decline in investment value.

"If the fiduciary makes an investment mistake, then the focus is typically restoring value to the beneficiary. But here, the focus seems to be restoring the specific security itself," Schenck said.

CNBC reported that the replacement provision may have been designed to correct trading errors, although the regulations do not explicitly restrict it to accidental sales.

The Treasury Department's temporary rules explain that holding requirements are intended to encourage donors to contribute stock by reducing the likelihood that recipients will immediately sell their shares.

"Donors are attracted by the hope that a stock contribution with a five-year holding period may lead recipients and their families to feel that they have a stake in the fate of the corporation." The regulations state.

Jane Ditelberg, chief tax strategist at Northern Trust, said the restrictions could make stock donations more attractive to people whose wealth is concentrated in a single company.

"Certainly, for people who have highly concentrated wealth in a company, and the assets are sitting in their own personal pockets, this makes it a lot easier to give," Ditelberg said.

Donors may also benefit from tax advantages when transferring appreciated stock to eligible charitable organizations, including potential deductions and avoidance of capital gains taxes. The treatment of particular contributions depends on the applicable tax rules.

A Treasury official told CNBC that the program aims to help children accumulate long-term wealth, particularly those from lower-income families.

"The major donors we've engaged are motivated by a desire to help children build generational wealth and get a head start on their financial future," the official said in a written statement.

The Treasury Department has said it is speaking with potential contributors across a broad range of donor sizes, describing them as "small to mega," but has not identified additional stock pledges since SpaceX President Gwynne Shotwell announced her commitment in July.

Shotwell previously pledged approximately 2 million shares for Trump Accounts, although that donation had not been distributed at the time of CNBC's report. The Treasury Department said approximately 70 million Trump Accounts had been created, including more than 60 million through a recent automatic enrollment effort.

The accounts are available to US citizens under age 18 who have valid Social Security numbers. The restrictions governing donated shares remain a central consideration in determining how Musk's proposed distribution could work.

The announcements come amid growing public concern about artificial intelligence. A poll conducted by The Associated Press-NORC Center for Public Affairs Research found that 64% of Americans believe AI is developing "too fast," while 27% said its pace was "about right" and 8% considered it "too slow."

PBS reported that Musk and other technology executives, including Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman, had said the previous month that AI development should slow. Anthropic also announced plans to direct committed shares to a new public benefit fund as the company prepared for a potential initial public offering as soon as November 2026.