Money Held in a Child's Name for Mom: Whose Asset Is It for Florida Medicaid?

Delia's $120,000: A Common, Well-Meaning Arrangement

Delia is 86 and lives in Hollywood. She is a composite, not an actual Truestead client, but her situation reflects something I see constantly in my practice. Back in 2022, Delia moved $120,000 of her savings into her daughter's personal bank account so her daughter could pay Delia's bills, her condo assessment, her Medicare supplement premium, and later her assisted living costs. The daughter never touched a dollar for herself. Every withdrawal went straight back out to one of Delia's expenses.

Now Delia needs nursing home level care and the family is applying for long-term care Medicaid. The question that landed on my desk is the one so many Florida families ask: whose money is that, really? Delia's, because she earned it and only parked it there for convenience? Or her daughter's, because it has sat in the daughter's name and under the daughter's Social Security number for four years?

How Florida's Department of Children and Families Sees a Transfer Like This

When a Florida resident applies for long-term care Medicaid, the Department of Children and Families (through its ACCESS system) and the CARES program at the Department of Elder Affairs review financial activity going back five years, the lookback period. Any transfer of an asset for less than fair value during that window is presumed to be a gift made to qualify for benefits, and a gift can trigger a penalty period during which Medicaid will not pay for care.

From DCF's chair, money that moved out of Delia's name and into her daughter's account in 2022 looks, on its face, exactly like a disqualifying transfer. The caseworker does not automatically know it was for bill-paying convenience rather than a gift. That is the presumption the family has to address, and it is why this issue shows up in almost every Medicaid application where a parent has relied on an adult child to handle money.

Rebutting the Presumption: Proving It Was Never a Gift

The presumption that a transfer was a gift is not the end of the conversation. It can be rebutted with evidence that the parent never intended to give the money away and that it was always being managed for the parent's own benefit. This is where a careful paper trail matters enormously, and it is also the foundation of what lawyers and courts call a constructive trust, an equitable concept that prevents one person from being unjustly enriched by property that was really always meant for someone else.

For Delia's family, the evidence that helped tell the real story included:

• Bank records showing every withdrawal from the daughter's account was paid to Delia's landlord, utility providers, insurance carriers, medical providers, or the assisted living facility, never to the daughter's personal expenses.
• A simple handwritten or typed ledger the daughter had kept (even informally) tracking deposits from Delia and payments made on Delia's behalf.
• The absence of any gift tax return, estate planning document, or written statement suggesting Delia intended to give the money away.
• Delia's own consistent statements, where she was able to make them, that the money was hers and was only being held to pay her bills.

None of this guarantees a favorable outcome at ACCESS, and every case is reviewed on its own facts. But a clear accounting that matches deposits to specific expenses, over time, is the strongest tool a family has to show a caseworker and, if necessary, the Office of Appeal Hearings that this was never a completed gift.

The Hidden Risk While the Money Sits in the Child's Name

Even setting Medicaid aside, I want families to understand what is actually at stake while a parent's money sits titled in an adult child's name. Legally, that account belongs to the child. If the child is sued, files bankruptcy, falls behind on debts, or goes through a divorce, a creditor or a divorcing spouse may have a claim to reach funds in that account, because on paper it is the child's asset, not the parent's.

Delia's daughter was fortunate. Her marriage was stable and she had no creditor problems. But I have seen families where a sibling's divorce attorney discovered a parent's life savings sitting in the sibling's account and argued it was a marital asset subject to division. That risk exists the entire time the arrangement is informal, regardless of how carefully the money is being spent on the parent's behalf.

Three Paths Forward, and the One Delia's Family Chose

Once this kind of arrangement surfaces before a Medicaid application, Florida families generally have three realistic options:

• Return the funds and plan properly. The daughter transfers the $120,000 back into an account titled in Delia's name, managed under a valid durable power of attorney. From there, the family works with an elder law attorney on legitimate spend-down or asset protection strategies, timed correctly relative to any future application.
• Document the constructive trust thoroughly. If returning the funds is not practical, the family builds the strongest possible accounting and presents it to DCF with the application, asking that the funds not be treated as a disqualifying gift because they were never gifted at all.
• Accept a penalty period. If the transfer cannot be adequately explained or documented, the family may need to accept that a penalty period applies and plan around it, often using other assets or family resources to privately pay during that window.

Delia's family chose the first path. Her daughter returned the full $120,000 to an account titled solely in Delia's name. Delia's son, under a properly executed durable power of attorney (governed by F.S. Chapter 709), then opened a dedicated account to manage her bills going forward, with clear recordkeeping from day one. Because the funds were returned and properly documented well before the Medicaid application was filed, the family avoided the uncertainty of arguing the constructive trust theory at all, and the application moved forward on much cleaner footing.

This article is for general informational purposes only and does not constitute legal advice, nor does reading it create an attorney-client relationship. Florida estate, elder, probate, and real estate law are fact-specific and change over time. Consult a licensed Florida attorney about your individual circumstances. Arthur Simpson, Esq. is licensed to practice law in the State of Florida. Attorney advertising.