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What's a Ladybird deed?

A Ladybird deed is a method of estate planning that can help you qualify for long-term nursing care through Medicaid and avoid probate. Also known as an "enhanced life estate deed," the Ladybird deed is not well-known -- or well-understood.

Named after Lady Bird Johnson (as you probably guessed), this particular estate-planning tool is only available in three states: Texas, Florida and Michigan. A Ladybird deed has significant advantages that are worth considering.

How does a Ladybird deed work?

Essentially, as the owner of your own property, you name yourself as both the grantor and grantee on a quitclaim deed -- with the unrestricted right to sell, mortgage, lease or give the property away during your lifetime. You also name an alternate beneficiary. As long as the property isn't otherwise disposed of prior to your death, it is immediately conveyed to that alternate party (your heir).

It's a simple, effective method of transferring ownership of the property upon your death. All the default beneficiary on the deed has to do after your death is record the death certificate and file the appropriate paperwork with the local assessor's office. In this manner, Ladybird deeds work similar to a transfer-on-death deed in other states.

What are the main benefits of this type of deed?

Typically, anytime you need long-term care in a nursing home or assisted-living facility, you have to apply for Medicaid. Medicaid uses a five-year "look-back" period when determining if your assets are minimal enough to qualify you for care. Simply transferring property out of your name to your heir during that time period can disqualify you from the Medicaid program. When you use a Ladybird deed, however, you aren't actually transferring the property out of your name. At the same time, the property won't become part of your estate -- which means it can't be taken by the government to recoup your Medicaid debt.

A Ladybird deed is just one of the methods that can be used to protect your assets from creditors both before and after your death. For more effective estate planning guidance, seek additional information today.

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14881 Farmington Road
Livonia, MI 48154

Phone: 734-245-9289
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