The Short Answer

In Pennsylvania, the Uniform Transfers to Minors Act (UTMA) allows a minor’s share of an inheritance (including sale proceeds from inherited real estate) to be held by a custodian for the minor’s benefit. The key requirements are that the transfer is made in the UTMA form, the custodian takes control and manages the funds prudently, keeps the property segregated with proper records, and ultimately transfers the custodial property to the beneficiary when the custodianship ends.

What Pennsylvania Law Says

When a minor becomes an owner through inheritance (for example, after a parent dies without a will), the minor generally cannot directly receive and manage real estate sale proceeds. Under Pennsylvania’s UTMA, the minor’s interest can be held as custodial property, which the statute defines to include the income from and proceeds of the transferred property. That means the minor’s share of closing proceeds can be placed into a UTMA custodianship and managed until the law requires distribution to the now-adult beneficiary.

At a high level, UTMA compliance focuses on: (1) creating the custodianship using the required designation language, (2) placing the custodian in control, and (3) the custodian’s fiduciary-style duties (prudent management, segregation, and recordkeeping).

The Statute

The primary law governing this issue is 20 Pa.C.S. § 5312.

This statute requires the custodian to take control of custodial property, manage and invest it under a prudent-person standard, keep it separate from other property, and maintain records that can be inspected by a parent/legal representative (and by the minor after age 14).

In addition, the UTMA sets out how a valid UTMA transfer is created (including for real property and other assets) using the required “as custodian for (minor) under the Pennsylvania Uniform Transfers to Minors Act” designation. See 20 Pa.C.S. § 5309.

Why You Should Speak with an Attorney

While UTMA provides a framework, applying it to a real-world inherited-home sale involving an adult heir and a minor heir (especially with family members living out of state) is rarely simple. Legal outcomes often depend on:

• Strict compliance with the UTMA transfer form: If the minor’s share is not titled/paid into an account using the statutory UTMA designation, you can end up with a closing that the title company won’t fund, or proceeds that are not properly protected as custodial property under Pennsylvania law. See 20 Pa.C.S. § 5309.
• Burden of proof and fiduciary exposure: The custodian must follow a prudent-person standard, keep the funds segregated, and keep records. Missteps can create personal liability allegations later (even if intentions were good). See 20 Pa.C.S. § 5312.
• Jurisdiction and cross-state complications: UTMA jurisdiction can depend on residency and where the property is located, and the custodianship can remain subject to Pennsylvania law even after moves. See 20 Pa.C.S. § 5302.

In your fact pattern, there are also probate and title issues layered on top of UTMA—who has authority to sign, how the minor’s ownership interest is handled at closing, and how the proceeds are documented and protected. For more background reading, you may find these helpful: delaying a minor’s inheritance in Pennsylvania and handling disagreements about selling an inherited home.

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Disclaimer: This article provides general information under Pennsylvania law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.