How does a Lady Bird Deed affect my eligibility for Medicaid benefits in Texas?

At the Law Office of Dana Baker, we’ve advised numerous clients in Texas on the benefits of utilizing what’s known as a Lady Bird Deed to safeguard their homes from Medicaid recovery efforts. This strategy often comes into play when an elderly individual, possibly due to illness or incapacity, can no longer live independently. Families seeking Medicaid assistance for expensive assisted living or nursing care face a significant hurdle: to be eligible, an applicant’s assets must not exceed $2,000. However, certain assets, like the applicant’s primary residence, are exempt from this limit. For many, this residence is not only their most valuable financial asset but also holds deep sentimental value.

Attempting to sell the home would directly impact the $2,000 asset threshold, necessitating the expenditure of sale proceeds on living costs before Medicaid eligibility could be established. Transferring the home to a family member might seem like a solution, but this is complicated by a five-year “look-back” period during which the government can still consider the asset as part of the Medicaid eligibility determination.

A Lady Bird Deed offers a strategic solution within Texas, allowing the property to pass directly to designated family members or others upon the grantor’s death, bypassing the probate process where Medicaid typically seeks to recover benefits paid. Crucially, a Lady Bird Deed is revocable, meaning no legal transfer of property occurs until the grantor’s death, thus avoiding the five-year look-back. As a result, utilizing a Lady Bird Deed does not jeopardize Medicaid eligibility, nor does it allow Medicaid to claim the property for benefit repayment after the grantor’s passing.

Employing a Lady Bird Deed is an effective and straightforward method to protect a homestead from being consumed by costs that Medicaid could otherwise help cover. For more information on how this could apply to your situation, please contact the Law Office of Dana Baker at 979-310-5507.