A uniform state law providing a statutory framework for transferring property to minors through a custodian, who manages the property until the minor reaches a specified age (typically 18-25, depending on state). UTMA allows simpler transfers than formal trusts, covering various property types including securities, real estate, and tangible property.
UTMA (often pronounced "UT-ma") lets you give property to kids through an adult custodian who manages it until the child reaches adulthood (age varies by state). It's simpler than creating a trust but less flexible—the child gets everything at the set age.
⏱ When you'll encounter this term
- Setting up custodial investment accounts for children
- Leaving inheritances to minor beneficiaries
- Making gifts to grandchildren
- Bank and brokerage account applications
"Grandma left $50,000 to my daughter 'under UTMA' with me as custodian. I manage and invest the money for her benefit until she turns 21 (our state's UTMA age), then she gets it all outright whether she's ready for it or not."
⚖️ Compare: UTMA vs Trust for Minors
Simple, statutory framework. Ends at specific age. No flexibility. Child gets everything automatically.
Custom terms possible. Can extend beyond age 18-25. Flexible distributions. More control, higher costs.
💡 Did you know?
UTMA's main limitation is inflexibility—when the child reaches the termination age, they get everything, period. If you're worried about an 18- or 21-year-old getting $100,000 all at once, a trust with gradual distributions might be better than UTMA.