Will a enhanced life estate deed cause a Medicaid penalty?

jomirel · Joined: 18 Jun 2007 Posts: 2 2.85 Dollars($)

We recently applied for Medicaid in Texas for my elderly, disabled mother who is in a nursing care facility. We spent down all her assets with the exception of her home. We put that in a "lady bird deed". Medicaid notified me that she is going to be penalized for having a "lady bird deed" on the home. I was under the impression that this deed would not cause a penalty period. Should we have waited to draw up the deed for a later time? Please help...

adonis · Posted: Mon Jun 18, 2007 8:44 pm Post subject:

Welcome Jomirel,

I think you should have waited for some more time prior to drawing up the deed. but hey, did they give you the condition that you cannot draw up any deed or else you will be penalized. They must have informed you about this earlier.

jomirel · Joined: 18 Jun 2007 Posts: 2 2.85 Dollars($)

Actually, the medicaid case worker was nice enough to tell us that my mother will be penalized for having the lady bird deed. And put her application as "pending" in case we decide to "void" the deed. Interestingly, we hired a law firm for legal advice as soon as my mother entered a nursing home and they are the ones who encouraged us to draw up the lady bird deed and include it with my mother's medicaid application. How can an elderly, disabled and widowed person protect the only thing left she owns and not be penalized by Medicaid?

Guest

I understand but if that's the rule, you can't really go beyond it. You can at best request them to spare your mother as she is disabled and old enough to bear the penalty.

sara

Hi Jomirel,

Welcome to the forums.

The law firm, as I feel, shouldn't have encouraged you even when they know that it may lead you into trouble. Anyway, what's the penalty that you'll have to pay?

Guest

The penalty is assessed by disqualifying the applicant for a period of several months even for years. I have not been told the exact time period my mother will be disqualified.

miller_st · Joined: 17 Jan 2007 Posts: 917 168.92 Dollars($)

Hi Joann,

Penalty period is calculated by dividing value of property transferred by what is determined to be average private pay cost of any nursing home in your state by Medicaid.

As an example, if in your state average monthly cost of care is $6000 & property worth $180,000 is transferred, then the person would be ineligible for benefits for 30 months ($180,000 divided by $6000 = 30).

Miller

Guest

I was told that if you have a Enhanced Life Estate Deed that medicaid could not take your home away from you. That she would have complete control over home and after she dies it will go to the heirs that are stated in the will. They said it really is from the Ladybug deed? is the right?

Niicss · Posted: Mon Aug 20, 2007 4:43 pm Post subject:

Janet

Enhanced Life Estate Deed/Lady Bird Deed, does enable a person to have the home exempt from medicaid claims during his lifetime. And also enable persons named on the deed receive the house free from medicaid claims.

Guest

timing is key, disposal of assets within 60 months/5 years BEFORE APPLYING causes a penalty ..... i haven't read of any penalty AFTER QUALIFYING ..... in texas a home's value is exempt for qualification purposes, but subject to merp if no ladybird deed is done after qualifying or before 5 years before the original application is filed

[Turned in lower caps as per the forum rules]

Guest

My mother who currently lives in her home with severe demencia will have to file for medicade. Her home is all she has which is currently in a trust to us her three children. We were recently told we should not have done that and that we should have done a Ladybird Deed. It has been in trust for 2 1/2 years. What will our liabilities be with the filing of medicade?

sara · Posted: Thu Oct 30, 2008 2:41 am Post subject:

Hi Stylistathome,

I'm sorry to hear about your mother's illness. But I guess your mother won't be able to qualify for Medicaid assistance. This is because Medicaid does not approve property transfer within 5 years prior to the application. Since it's been just 2 and 1/2 years since the transfer, I guess your mother won't be eligible for it. However, you can still speak to a Medicaid attorney for further information in this regard.

Take Care

Guest

Thru a major screw up on my attorney's part, homestead replacement was done, with the intent to live there, but actually parent never did. Medicaid denied and property is up for sale, I am being told to rent it for income stream to nursing home...I do have a lady bird deed in place for THIS property, but I cannot get a black and white guarantee answer that if I retain this property, make it a rental if I can and provide income stream that the end result will be upon my parent's passing, medicaid will put a lien on property after I have maintained it for years and paid them also. Is there a guarantee that on lien would be placed on this property?? If not, it seems to not behove me to keep it.

Guest

Oh, the property is in Florida

Niicss · Posted: Fri Dec 12, 2008 2:51 am Post subject:

Hi Christyne

As far as I know Medicaid cannot place liens on the property provided if the property was transferred to someone with the help of a ladybird deed prior to making it a rental property.

Thanks.

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