What Is The Caregiver Child Exemption?
The caregiver child exemption relates to the transfer of a person’s primary residence or homestead to a caregiving child in connection with a Medicaid application. If a caregiver child has been caring for his or her parent for at least two years immediately before the parent has to go into a nursing home and that son or daughter provides an affidavit saying that he or she provided care to the parent and that it delayed the parent’s entry into a nursing home, then under the Florida Medicaid law, the deed to the child would not be considered an invalid transfer of assets, and the child would be able to inherit the house and do with it whatever they please.
The caregiver child exemption provides flexibility when a parent goes to a nursing home but does present negative income tax consequences associated with receiving gifted versus inherited property. As a result, it’s not generally the preferred option. Caregiver child exemptions are best used in situations where there is little appreciation in the property and the child caregiver wants to liquidate the house and use the money for the parent’s benefit and care.
Is Advance Planning Required?
If someone wants to use the caregiver-child exemption under Florida Medicaid law, they must swear under penalty of a felony to the state of Florida that they resided in that home for at least two years immediately prior to the parent entering the nursing home. Transfer of the property from the parent to the child can occur on the eve of filing a Medicaid application.
What Happens If The Elderly Parent Passes Away During The Two-Year Caregiving Period?
If the parent passes away before the two-year caregiving period, then the inheritance rules of the house would be governed by the parent’s will, trust, or titling of the deed. Prior to the passing of the parent, a discussion and planning between the parent and the child caregiver regarding the inheritance of the house should be had.
Can The Elderly Parent and Adult Child Move To A Different Home During The Two-Year Period?
While there is no law relating directly to circumstances in which an elderly parent and child move to a different home during the two-year caregiving period, the conservative answer would be that only a home which has been the primary residence for at least two years would be transferred upon the death of the elderly parent. A broader answer that could be consistent with the intent of the rule would be that the parent and child are allowed to move to any home within that two-year period.
What Is A Gift To A Child Under The Uniform Transfer To Minors Act?
A gift to a child under the Uniform Transfer to Minors Act is a gift that someone can make in their lifetime or under a will giving money to a minor child or a child who’s not at least 25 years old and otherwise eligible to receive a gift under the act. For example, if someone wanted to leave their six-year-old great-grandchild $10,000, then the $10,000 could be put into an account managed by a custodian until the child reaches a certain age. In essence, the Uniform Transfer to Minors Act in Florida is a way to give property to minors with some degree of oversight and control, but the use of that money could be rigid or lack supervision.
What Happens If Assets Are Left To Minor Children And No Custodial Account Or Trust Is Set Up?
In Florida, if there is more than $15,000 given to a minor child under the age of 18, then guardianship of the property would need to be established through the probate court in Florida, which creates additional legal processes and red tape. Court approval and supervision of all expenditures of that money would be necessary until the child turns 18 years old, at which point the child would receive the remainder of the money. In most cases, leaving money to a minor outside of a trust will involve appointed guardianship and extensive legal fees, both of which could be avoided by properly setting up a trust for a minor or a Uniform Transfers to Minors Act account.
Who Manages Property Inherited By Children In Florida?
In most cases, property that’s inherited by children in Florida will be managed by the natural parents. If the amount that has been inherited is less than $15,000, then the natural parent will be able to manage that money with little court oversight. However, if the account or the inheritance exceeds $15,000, then it’s likely that court supervision and a guardianship will be required, even if the natural parents are involved. If there aren’t any natural parents, then the closest relatives to the minor children would need to petition the court for a proper person to manage the funds left to the minor children.
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