Why “Do-It-Yourself” Asset Transfers Backfire: How Courts Unwind Questionable Conveyances in Florida

Fri Oct 24, 2025 | Asset Protection |

Most people who try to DIY asset protection generally have the best intentions. They typically make a gift, transfer a house, or add a family member to a bank account because they think it will protect the property from probate and creditors or, at the very least, simplify things for loved ones later.

Yet in Florida, such DIY moves often end up hurting families. Instead of helping, these “informal” transfers can:

  • Cause legal challenges
  • Tax beneficiaries later
  • Lead to Medicaid ineligibility
  • Allow clawbacks by creditors
  • Lead to probate litigation between family members

That’s why these types of questionable transfers are almost always unwound (or reversed) by courts when proper legal guidance is not used.

What’s Considered a “Questionable” Transfer in Florida?

Florida law looks beyond the face of a transfer or document. For instance, if a transfer of assets into another person’s name occurs during a lawsuit or without an exchange of money (or was done with someone who stands to improperly gain from it), that’s a red flag.

Courts look at the whole picture, including:

  • The timing of the transfer
  • One’s relationship to the new owner
  • Ongoing control or use by the original owner
  • Lack of valuable consideration (money or equivalent value)
  • Intent to defraud creditors 
  • Change in the original owner’s ability to pay debts

If a court determines a transfer was “not real” based on any of the above-mentioned reasons, it can be reversed under Florida law. These are often called sham or fake transfers. Consider the following examples.

Example 1: Quitclaim Deed to a Child

The parent is told they will lose everything if they apply for long-term care, so they deed the family home to their adult child just in case. The child’s name is on the title, but the parent continues to live there, pays the taxes, and pays the insurance.

Effectively, nothing has changed. The transfer was a sham.

What Could Happen: A creditor later files a claim, or a sibling challenges the transfer after the parent dies. The court can view the transfer as a sham and order it reversed. Instead of being protected from probate or creditors, the property may now be subject to litigation or probate.

Example 2: Adding Someone to a Bank Account

The parents add one child to a bank account “just for convenience.” The child withdraws money for bills, and the funds are to be shared by all siblings. The parents may believe this was only a convenience arrangement, but it usually creates a full ownership interest in the child under Florida law when the parents die.

What Could Happen: If the other children object, it will likely turn into a probate litigation dispute, and all parties will be treated as strangers by the court. Relationships will likely be damaged, and the money can be tied up until the dispute is resolved. Simply put: What started as a quick fix ends up in months of conflict.

DIY Transfers Often Mean Inheritance Problems

DIY transfers often ignore unintended tax consequences. When assets pass through an estate plan or probate correctly, many heirs receive a step-up in basis that can greatly reduce capital gains taxes on a later sale.

But if parents transfer property during their lifetime in an informal way, the child(ren) may lose the tax benefit and face a much higher tax bill when they sell or transfer the property to their own children.

Safer Planning Tools That Work in Florida

DIY planning is a risky shortcut, but families have many other ways to plan to protect and transfer assets in a legal and tax-efficient way.

Skilled Florida estate planning attorneys use the following tools on a routine basis:

  • Asset protection planning that follows Florida law
  • Homestead protection strategies
  • Powers of attorney that are carefully drafted and tailored to specific needs
  • Trusts built for Medicaid or long-term care, from the ground up
  • Business entities created and managed for that purpose, not after the fact

These tools only work if done properly, but when they are, they can make a big difference and protect your overall estate plan.  

How To Protect Yourself if You’ve Already Made a Transfer

If your DIY transfer is later challenged and the court finds that you actively tried to conceal it, the legal consequences can be much worse. The better approach is to be upfront about it. If you or a loved one has already made a transfer, a probate attorney can discuss the specifics of your situation and review the following:

  • Purpose of the transfer
  • Timing of the transfer
  • Relationships of transferees
  • Use of the asset or property after the transfer
  • Exchange of money or consideration
  • The intent behind the transfer
  • Potential impacts on creditors, heirs, or applicants for Medicaid or other programs

Based on the facts, your attorney may help you:

  • Voluntarily unwind the transfer
  • Restructure the ownership documentation
  • Draft and sign formal documents regarding the transfer
  • Create written documentation of purpose and intent 
  • Help protect against future family disputes

Why Probate Courts Get Involved in DIY Transfers

Even transfers intended to “avoid probate” can end up in a probate court for litigation. Some of the core questions most probate judges will ask include:

  • Was this a “real” transfer?
  • Did the person who signed have the capacity to do so?
  • Was the transfer the result of undue influence by another?
  • Did the transfer contradict the signer’s true wishes?

DIY Asset Transfers Might Cost Your Loved Ones Dearly in the End

To be clear, the vast majority of these DIY transfers do not fail because someone was dishonest or trying to “pull a fast one.” They fail because Florida law treats these transfers differently from what many people expect. If the transfer wasn’t structured correctly, wasn’t documented properly, or didn’t account for Medicaid or tax planning issues, a court can void or unwind it, sometimes long after it was done.

That being the case, planning in a way that uses documents that will stand up in court later is the safest approach.

Work With a Skilled Asset Protection Attorney Today

Are you worried about a prior transfer, or are you considering making a transfer now? Contact Ellis Law Group today to learn how to do it the right way under Florida law.

Categories