Is my grandmother’s ladybird deed set up correctly for Medicare/Medicaid eligibility?

Lexi, Chatbot

It’s great that you’re taking steps to protect your grandmother’s home. Have you already drafted the ladybird deed, or are you looking for assistance drafting it?

Lexi, Chatbot

Have you consulted with any other professionals, such as a financial advisor or elder law attorney, regarding this deed?

Lexi, Chatbot

Is there anything else the lawyer should know before I connect you?

Barrister

Hello and welcome. My name is Barrister, and I am a licensed attorney. I’m happy to help. There may be short delays in my responses as I work with multiple clients at once.

If you can upload the document, I can review it and let you know if anything appears incorrect.

Barrister

Assuming the grandmother is the current owner and the property is intended to transfer to you and your husband, the deed appears to be completed correctly. Your grandmother will need to sign it in front of a notary public, and then it must be recorded with the local land records office.

Barrister

I’m limited to one legal topic per question thread under site rules. You would need to post a new question for Medicaid-related issues, but you’re welcome to request me again if you’d like.

Barrister

I apologize for the confusion. I understood your initial request as asking whether the deed was legally valid and recordable, which it is.

Barrister

Medicare and Medicaid are separate programs with very different rules, and that distinction matters a lot for estate planning. Medicare is a federal health insurance program and does not have estate recovery. Medicaid, on the other hand, is means-tested and is subject to mandatory estate recovery for certain benefits, particularly long-term care.

Under federal law, states are required to seek recovery from a Medicaid recipient’s estate for the cost of certain benefits paid after age 55, including nursing home care. This requirement comes from 42 U.S.C. § 1396p(b). Each state implements this requirement through its own Medicaid estate recovery program, but the federal mandate is the baseline.

If your concern is Medicaid estate recovery, specifically protecting the home from being claimed after she passes due to Medicaid-funded long-term care, then yes — a Lady Bird deed (enhanced life estate deed) is commonly used in states that recognize it to accomplish that goal.

A Lady Bird deed works because the homeowner retains an enhanced life estate with the power to sell, mortgage, or revoke the deed during her lifetime, while the remainder interest passes automatically to the named beneficiaries at death. In states that recognize enhanced life estate deeds, the property typically does not become part of the probate estate at death. Since many Medicaid estate recovery programs are limited to the probate estate, the home may fall outside the scope of recovery.

This distinction is critical:

• Medicaid recovery generally applies to assets that pass through probate.
• A Lady Bird deed causes the property to transfer by operation of law, not through probate.

As a result, in practice and under state Medicaid policy in Lady Bird–recognition states, the home is often not subject to estate recovery, even though Medicaid benefits were received during life.

That said, Lady Bird deeds are not authorized by statute in every state and are recognized primarily through state law and practice. They are commonly accepted in states such as Michigan, Florida, Texas, and a limited number of others, but they are not valid everywhere. Additionally, some states have expanded estate recovery beyond probate, which can change the analysis.

Because Medicaid estate recovery is governed by a mix of federal law (42 U.S.C. § 1396p) and state-specific Medicaid rules, it is important to confirm:

• Whether your state recognizes Lady Bird deeds, and
• Whether your state’s recovery program is limited to the probate estate or expanded beyond it.

If your goal is Medicaid planning and home protection, a Lady Bird deed is often an effective tool when used in the right state, but it should be implemented with careful attention to state Medicaid policy to ensure it actually achieves the intended protection.

Barrister

Glad to help. Be safe.