Q: How to transfer a home from mother to daughter in Florida due to health concerns?

A: I am sorry to hear about your mother's health struggles related to her stroke and hope she will recover and improve soon. Transferring a property can be problematic, this is especially true if it concerns a Florida Protected Homestead as special rules, laws and protections apply to it. Also, transferring any asset could have potential negative impact on Medicaid and qualification for benefits (remember there is a 5-year lookback period), furthermore, transferring a property when someone is lacking or has limited mental capacity (such as with a stroke) could cause problems ongoing or later if someone raises the issue related to undue influence or similar even if everyone appears to initially be in agreement, so be aware. I would advise that some version of proper estate planning would be what needs to be done related to a Will, Power of Attorney, Florida healthcare Surrogate or even a Trust as an option amongst other estate planning documents. Specifically related to the property, possibly an enhanced life estate deed (ladybird deed) may want to be considered along with the above estate planning or separate related to the property alone. Your starting point where you could provide additional details, and information would be with a Florida Estate Planning Attorney where they could more precisely advise you based on the additional specifics you can provide.

A: I'm deeply sorry to hear about your mother's stroke, and I sincerely hope she's making a good recovery. Given her health and the ongoing mortgage payments, it's essential to carefully consider the legal and financial aspects of managing her property.

In Florida, several types of deeds can be used for property transfer, each with distinct implications. Here's a breakdown of common options:

Quitclaim Deed: While often used for family transfers, this offers the least protection to the grantee (you, in this case). It only transfers whatever interest the grantor (your mother) currently holds.

General Warranty Deed: This provides the strongest protection, as the grantor guarantees clear title to the property.

Enhanced Life Estate Deed (Lady Bird Deed): This is a particularly useful tool in Florida. It allows your mother to retain control of the property during her lifetime and transfer it to you upon her death, bypassing probate. This can also be advantageous for Medicaid planning.

Living Trust: Placing the property in a living trust is another effective way to avoid probate.

Key Considerations:

Gift Tax Implications: Transferring the property may be considered a gift, potentially triggering federal gift tax implications. Understanding the current gift tax exclusions and reporting requirements is crucial.

Mortgage Restrictions: If a mortgage exists, the lender may have restrictions on property transfers. Review the mortgage documents and consult with the lender.

Medicaid Planning: If your mother anticipates needing Medicaid in the future, transferring the property could affect her eligibility. Medicaid has a "look-back" period that scrutinizes recent asset transfers.

Homestead Exemption: Florida's homestead exemptions offer property tax benefits and creditor protection. Transferring ownership could impact these exemptions.

I strongly recommend seeking professional legal counsel to navigate these complexities and protect your mother's interests.

A: First - be careful that this is really what you want. Transferring property before death can result in an adverse tax consequence to the daughter (loss of step up in basis). Mom may want to utilize a lady bird deed (i.e. enhanced life estate deed) instead.

Also, as another attorney indicated, the transfer (within five years) can adversely impact Medicaid long-term care planning (homestead is not counted as an asset in Florida, but gifting the homestead away would implicate the look-back penalty within five years).

There is a "child caregiver exception" to the five year look back period if daughter has lived with mom for two years (or more) and as caregiver prevented mom from having to move into a long-term care facility.

Consider consulting with an experienced elder law attorney to discuss before doing anything with the real estate.