Florida UTMA Accounts Guide

A UTMA account in Florida is a custodial account created under the Florida Uniform Transfers to Minors Act for the benefit of a minor child. The account is the most common method of gifting assets to minors in Florida. Property in a UTMA account legally belongs to the minor, not to the custodian who manages it. Because the minor owns the assets, a judgment creditor of the custodian cannot reach the funds in a properly titled UTMA account.

The Florida UTMA statute is Chapter 710 of the Florida Statutes. The custodian creates the account by titling assets in the custodian’s name followed by “as custodian for [minor’s name] under the Florida Uniform Transfers to Minors Act.” Proper titling is essential. An account that does not follow the statutory language may not receive the protections the statute provides.

Creditor Protection for UTMA Accounts

Money in a Florida UTMA account is the property of the minor beneficiary from the moment of the transfer. A judgment against the custodian, whether the custodian is a parent, grandparent, or other adult, cannot be satisfied from the child’s custodial assets. A writ of garnishment served on a bank holding a properly titled UTMA account should not reach the funds because they do not belong to the judgment debtor.

The protection runs in the custodian’s favor because of ownership, not because of a statutory exemption. The custodial property is simply not the custodian’s asset. This distinction matters because the protection does not depend on the custodian claiming an exemption or filing any paperwork—the account title itself establishes that the property belongs to the minor.

A creditor of the minor child can potentially reach the UTMA assets, though judgments against minors are uncommon. After the minor reaches the age of majority and takes control of the account, the funds become the young adult’s personal property and are subject to the young adult’s creditors like any other non-exempt asset.

Fraudulent Transfer Risk

The creation and funding of a UTMA account can be challenged as a fraudulent transfer if a creditor demonstrates that the transfer was primarily intended to place the custodian’s assets beyond creditor reach rather than to benefit the child. The badges of fraud analysis applies to UTMA contributions just as it applies to any other transfer.

Contributions made as part of a longstanding pattern of gifting—annual birthday deposits, regular education savings—are more defensible than a single large transfer made shortly after a creditor threat. A custodian who funds a UTMA account while insolvent or facing pending litigation faces heightened scrutiny. The four-year statute of limitations for fraudulent transfer claims applies, meaning contributions made more than four years before a creditor challenge are generally beyond reach.

The best practice is to fund UTMA accounts consistently over time and before any creditor relationship arises. Contributions that coincide with the annual gift tax exclusion amount reinforce the inference that the transfer is a legitimate gift rather than an asset protection maneuver.

What Can Be Transferred

Florida’s UTMA statute permits transfers of a broad range of property types to a custodial account. Eligible assets include cash, securities, life insurance policies, annuities, real estate, and tangible personal property with a title document. This range is broader than the older Uniform Gifts to Minors Act, which was limited to cash and securities.

The ability to transfer real estate and titled personal property into a UTMA account distinguishes it from many other gifting mechanisms. A parent can deed investment property to a custodial account for a minor child, and that property would be managed by the custodian until the minor reaches the age of majority. The custodian has the authority to sell, invest, reinvest, and manage the property in the account using the standard of care that a prudent person would exercise managing another person’s property.

Age of Majority and Account Termination

The age at which a Florida UTMA account terminates depends on how the account was created. The default termination age is 21 for accounts created by gift, will, or trust. Accounts created by operation of law—such as when a minor inherits property through intestacy or receives funds as a named beneficiary without a custodial designation—terminate at age 18.

Florida law permits the person creating a UTMA account by gift or under a will or trust to extend the termination age to any age up to 25. The extension must be specified at the time the account is created. A custodian cannot retroactively extend a UTMA that was originally set to terminate at 21.

Even when the account is set to terminate at age 25, the beneficiary has an absolute statutory right to compel immediate distribution of the entire custodial property upon reaching age 21. The custodian must provide written notice to the beneficiary at least 30 days before, and no later than 30 days after, the beneficiary’s 21st birthday informing the beneficiary of this right. If the beneficiary exercises the right, the custodian must distribute the property regardless of the original termination age.

This compel-distribution right has asset protection implications. A creditor of the beneficiary who has reached age 21 may argue that the beneficiary’s absolute right to compel distribution makes the custodial property reachable. The property effectively becomes the beneficiary’s on demand once the statutory right matures.

UTMA vs. ITF, POD, and TOD Accounts

UTMA accounts are sometimes confused with other types of accounts established for children or other beneficiaries. The distinctions are significant from a creditor protection standpoint.

An “in trust for” (ITF) account, a “pay on death” (POD) account, and a “transfer on death” (TOD) account all designate a beneficiary who receives the funds upon the account owner’s death. During the owner’s lifetime, the money in these accounts belongs to the owner. The owner retains full access to the funds and can change the beneficiary at any time. Because the owner retains ownership, a judgment creditor of the owner can garnish an ITF, POD, or TOD account to satisfy a judgment.

A UTMA account, by contrast, transfers ownership to the minor at the time of funding. The custodian manages the property but does not own it. This immediate transfer of ownership is what creates the creditor protection—the custodian’s creditors cannot reach property that the custodian does not own.

Feature	UTMA Account	ITF / POD / TOD Account
Ownership during custodian’s/owner’s lifetime	Minor beneficiary	Account owner
Creditor protection for custodian/owner	Yes, property belongs to minor	No, property belongs to owner
Beneficiary can be changed	No, transfer is irrevocable	Yes, owner can change at any time
Beneficiary’s access before termination	Custodian controls distributions	No access until owner’s death
Effect at owner’s/custodian’s death	Custodianship continues with successor	Property transfers to beneficiary

UTMA vs. Irrevocable Trust

A UTMA account is simpler and less expensive to establish than an irrevocable trust, but it provides less control and shorter duration. The choice between the two depends on the size of the gift, the donor’s planning objectives, and whether extended asset protection for the beneficiary is a priority.

A UTMA account terminates no later than the beneficiary’s 25th birthday in Florida, and the beneficiary can compel distribution at 21. An irrevocable trust can last for the beneficiary’s entire lifetime and can include spendthrift provisions that protect the trust assets from the beneficiary’s creditors indefinitely. For families transferring substantial wealth to the next generation, an irrevocable trust with a spendthrift clause offers creditor protection that a UTMA account cannot match once the beneficiary reaches majority.

A UTMA account requires no attorney to establish and no ongoing trust administration. The custodian simply titles the account using the statutory language and manages it under the prudent-person standard. An irrevocable trust requires drafting, may require a separate tax identification number, and involves more complex administration. For modest gifts intended to benefit a child through college or early adulthood, a UTMA account is often the more practical choice.

Tax Considerations

Contributions to a UTMA account qualify for the annual gift tax exclusion of $19,000 per beneficiary in 2025 for individual donors, or $38,000 for married couples electing gift splitting. Contributions exceeding these thresholds require filing a gift tax return.

Investment income earned within a UTMA account is taxed to the minor. The first portion of unearned income is tax-exempt, and a second portion is taxed at the child’s rate. Unearned income above $2,600 is subject to the “kiddie tax” and taxed at the parent’s marginal rate. This tax treatment reduces but does not eliminate the income-shifting benefit of custodial accounts.

UTMA assets are treated as student assets for federal financial aid purposes under FAFSA, which assesses student assets at a higher rate than parent assets. A 529 college savings plan is treated as a parent asset for dependent students, making it more favorable for financial aid calculations. Families planning for both education funding and asset protection should coordinate UTMA contributions with 529 plan strategy. Florida provides a broad range of statutory exemptions that protect specific asset categories from creditors, and UTMA accounts function alongside these exemptions as part of a comprehensive plan.