Nursing home and assisted living expenses can quickly deplete a family’s savings, and many Florida residents worry that the state may seek repayment from their home after a Medicaid recipient dies. Florida’s Lady Bird deed is one planning tool that may help limit that exposure by shaping which assets fall within the pool the state’s Medicaid recovery program can claim.
Why estate recovery targets the home
That concern most commonly centers on the home, since Medicaid recovery programs typically target assets owned at the time of death. Florida law allows the state to pursue recovery against assets that pass through probate. Knowing which assets pass through probate can help heirs understand, and potentially limit, their estate’s exposure to recovery claims.
How a Lady Bird deed changes ownership
Florida allows a type of deed commonly called a Lady Bird deed. It lets a homeowner keep full control of the property during their lifetime. At death, the home passes to a named beneficiary. When properly drafted and recorded, it bypasses probate. Because Florida’s Medicaid recovery program can only reach probate assets, this approach may help protect the home from those claims.
Limits and planning risks to watch
Medicaid rules can change, so confirming current Florida program requirements before finalizing any deed is important. Coordinating the deed with existing wills, trusts and powers of attorney helps ensure the documents work together without creating gaps or conflicts. Key facts to confirm include:
- Title status: Whether legal title is clear and whether any existing liens, mortgages, or co-owners could affect the transfer.
- Florida homestead rules: Whether the property is a homestead and whether a spouse or minor children are involved, which can limit transfer options.
- The beneficiary’s circumstances: Whether the named beneficiary has creditors, Medicaid exposure or tax considerations that could complicate receiving the property.
Reviewing these points before recording the deed helps avoid complications that could affect the transfer.
When to review a Lady Bird deed with an attorney
Unlike many property transfers, a Lady Bird deed generally does not trigger Medicaid’s five-year look-back rules because the owner retains the right to revoke it. That distinction matters when planning around a future Medicaid application, which is why many Florida families include this deed in their elder law plans.
