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Elon Musk said on Monday that he will give every kid in America a share of SpaceX next year. He appeared to suggest the gift could land in Trump Accounts — thanking Brad Gerstner, an architect of the program, for "helping enable this" in a comment on X.

But if the shares are distributed through the new investment accounts for children, the gift could come with significant strings attached.

Musk's announcement comes weeks after the U.S. Department of the Treasury rolled out guidelines for stock donations to Trump Accounts, also known as 530A accounts. Those include restrictions on selling donated stock: Children who receive it generally cannot sell for five years, even if the company runs into financial trouble. 

Treasury's temporary regulations, subject to revision after public comment, aim to encourage stock gifts. But they also give donors unusual influence over children's investments, according to lawyers and philanthropic experts who spoke with CNBC. 

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In the broader world of charitable giving, donors can typically express preferences about how their gifts are managed, but the receiving organization or trustee retains final authority, said Carolyn Schenck, an attorney and former national fraud counsel at the IRS. 

Under the new Trump Account rules, however, it's "the donor that's dictating the terms of the gift," she said. 

Representatives for Musk, Gerstner and the Treasury Department did not respond to CNBC's requests for comment on the proposed gift.

According to the Treasury, about 70 million Trump Accounts have been created, including more than 60 million through a recent auto-enrollment effort. Trump Accounts are available to all children with U.S. citizenship under age 18 with valid Social Security numbers. 

Musk would be the second philanthropist to publicly announce a stock pledge to Trump Accounts: SpaceX President Gwynne Shotwell pledged earlier this summer to use the Trump Account program to gift some 2 million shares. That gift has not yet been distributed.

What stock sale restrictions mean for children

Trump Account beneficiaries do not have the latitude to sell under circumstances that other investors might otherwise.

Under the new rules, families cannot refuse stock gifted to Trump Accounts and generally cannot sell it until the earlier of five years or the end of the calendar year in which the beneficiary turns 17. Before then, early sales are permitted only in limited circumstances, such as certain corporate transitions or when the stock is formally delisted from a national securities exchange — not when financial or legal problems emerge that could prompt an investor to sell.

"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," said Adam Michel, director of tax policy studies at the Cato Institute, a libertarian think tank. "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."

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The temporary regulations also mandate that if any gifted stock is sold too early, the trustee must purchase the same number and class of shares "as soon as practicable." 

This increases beneficiaries' risk of loss if the share price rises before the trustee repurchases the stock, according to Schenck. Beneficiaries would ultimately bear that cost.

"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," said Schenck, who left the IRS in 2025 for law firm Caplin & Drysdale.

CNBC has learned the buyback provision is intended to quickly correct trading errors, though the regulations do not explicitly state that purpose or limit the requirement to accidental sales.

Donor incentives behind the holding rule

The temporary regulations cite donor interests. According to the text, "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."

Restricting sales virtually eliminates the risk for donors and their companies that Trump Account recipients will sell gifted shares en masse, liquidating a large enough position to depress share prices, according to Jane Ditelberg, chief tax strategist at Northern Trust.

"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," she said.

Generally speaking, donors can get a bigger tax benefit by gifting appreciated stock to charity than donating cash, as they can claim the charitable deduction and avoid capital gains tax on the gains.

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A Treasury official told CNBC that the rules are intended to build long-term wealth for children, especially in lower-income families, and encourage donations. "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.

Treasury has said it is in discussions with Trump Accounts donors ranging from "small to mega," but has not identified additional stock pledges since Shotwell's July announcement.

CNBC has identified fewer than a dozen pledges from philanthropists, though about four dozen major employers have committed to seed accounts for their employees' children.

In documents explaining the temporary rules, Treasury pointed to Michael and Susan Dell's $6.25 billion cash pledge and unspecified "similar donations," while acknowledging uncertainty about whether that level of giving will continue. "It is unclear whether this level of giving can be sustained in the long run or whether it is concentrated as Trump accounts are launching," the text states.

Legal questions around stock gifts

Trump Account funds generally may be invested only in low-cost index funds and exchange-traded funds. In the temporary regulations, the Treasury said directly contributed stock is different because it doesn't use account funds for the purchase.

But Ditelberg said a court could conclude that requiring an account to retain individual shares is still an investment decision — an argument that may carry more weight after the Supreme Court's overturning of Chevron deference. Because of the 2024 ruling, courts no longer have to defer to federal agencies' interpretations of statutes when the language is unclear. 

"These accounts are going to have to stay invested in those stocks, and the question is whether that's directly contradicting the terms of the statute," she said. "I can't tell you how a court would rule, but I could say there's room for a challenge here."

Ditelberg added that state law grants the right to disclaim an asset. She said it's unclear how the Trump Account donation procedures would accommodate that right.

Schenck noted that Treasury has broad authority to set the terms of Trump Accounts, and it is Treasury — not the original stock donor — that formally requires the shares to be held.

The arrangement also differs from traditional charitable giving. For example, donors who contribute stock to donor-advised funds can recommend how the assets are managed, but the sponsoring charity retains ultimate control, including the authority to sell the shares. This is required to meet the IRS's legal standards for taking a tax deduction on a charitable contribution.

"A key principle is that the charity must have genuine control over the donated assets, including the ability to determine when to sell them, for the gift to qualify as a completed charitable contribution," said Gil Nusbaum, chief administrative and legal officer of National Philanthropic Trust.

Experts say the broader question is whether Treasury's approach aligns with the law Congress enacted.

"Musk's gift would be incredibly generous, but it doesn't change the fact that Congress intended these accounts to be diversified," Michel said. "It wouldn't be a bad innovation for Congress to allow tax-free gifts of appreciated assets, but changes to the law should come from Congress, not by administrative fiat."