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Unsecured judgment creditors and lady bird deed
Anonymous2 views2 answers
i have heard that a lady bird deed allows the property owner to pass the property to his heirs outside of probate upon death free of Medicaid claims and liens and creditors claims is this true? This is for a single person with her daughter as the beneficiary
Yes, this is true. At least it's true at the moment. The Texas Health and Human Services Commission oversees the Medicaid program and they have some authority to change the administrative rules to recovering state money after the death of a Medicaid recipient. They have been known to publicly give a blessing to a planning strategy and then take it away a year later. But what do you have to lose? Your mother should consult an attorney briefly to determine her best alternatives.
Talk to an attorney knowledgeable in Medicaid law before taking any action. As the other attorney mentioned, the rules change all the time, so there is always the possibility a transfer of property for which one does not receive fair market value may trigger unwanted consequences (if the transfer occurs within the lookback period). One might consider selling a "remainder" interest in the house instead of gifting it, understanding the proceeds will be considered part of the applicants assets. An attorney would need to know more information to give you a recommendation.
