Uniform Transfers to Minors Act (UTMA): What Does It Mean?

A UTMA account is a custodial account that allows an adult to transfer assets to a minor, similar to a UGMA account, but with a broader range of allowed assets. In addition to cash and securities, UTMA accounts can hold real estate, royalties, and other types of property. A custodian manages the account until the minor reaches the age of majority, which is set by state law and can extend as late as 25 in some states depending on the terms.

Like UGMA accounts, contributions to a UTMA account are irrevocable and become the legal property of the minor. Families often choose UTMA accounts over UGMA accounts when they want to transfer more complex or varied assets to a child over time. The flexibility comes with the same tradeoff: once the child reaches the qualifying age, they gain full control of the account regardless of the custodian's original intentions.