Lady Bird Deed

A Lady Bird deed (also called an enhanced life estate deed) allows a property owner to keep full control of real estate during their lifetime and automatically transfer it to beneficiaries at death, avoiding probate. It is a very good and useful tool for Medicaid Planning.

There is something called Estate Recovery for Medicaid. This means that the Federal Government requires the individual states to recover their costs for Medicaid. Florida does this in Probate.  A Medicaid client must avoid probate to prevent this from occurring. Yes, Medicaid could take the house if not done properly. A Lady Bird would avoid this issue. However, it is not the answer for all circumstances.

I prefer to use a Revocable Living Trust instead of a Lady Bird Deed for regular estate planning. The reason is simple. If the named person on the Lady Bird Deed passes away before the individual owning the real estate, then now have to do a Probate because the beneficiary passed away. This is surely not the intended outcome.

In short, if it is for Medicaid Planning purposes, absolutely a Lady Bird is the solution. However, if it is for Estate Planning, then a Revocable Living Trust is a better solution.