What is a Lady Bird Deed?
Lady Bird Deeds are a useful tool in Medicaid Planning. The story goes that the former first lady herself used such a device in her own planning. That story remains unproven, but the device is still an effective tool in planning for Medicaid benefits.
The Problem
Many people of advanced age eventually find that the use of Medicaid is required in order to afford the rising cost of medical expenses. However, they don’t qualify for benefits due to the value of their home. The home is also subject to the Medicaid Recovery Program (or MERP) after one has passed away. Homeowners must choose between getting the benefits they need and preserving their most valuable asset.
Best of both worlds
Attorneys use Lady Bird deeds for Medicaid asset protection. A Lady Bird deed gives your home to whomever you choose upon your death. However, while you are alive, you keep the power to revoke, control, mortgage, or even sell the property. Upon your death property passes immediately to your chosen beneficiary. On the other side, it avoids the Medicaid Recovery Program or MERP entirely.
Drawbacks
The state of Texas, along with 9 other states, allows Lady Bird deeds. However, laws change all the time. These deeds exist solely to protect assets from Medicaid. Often law makers strike down devices that hide assets from benefit programs. While many companies are getting more comfortable with approving the sale of a house under a Lady Bird deed, it is possible that title companies will require a waiver from MERP in order to insure a sale of the house. In the meantime, the Lady Bird deed or enhanced life estate deed is an effective method of preserving your home while still qualifying for Medicaid.
Contact the Malolo Law Firm today to schedule a consultation about this Medicaid planning tool!