Reviewed by Long H. Duong, Esq., Florida Bar No. 11857 (admitted 2005), founder of LD Legal, LLC. Last reviewed August 2026.
Short answer: In Florida, a properly drafted Lady Bird Deed does not count as a transfer for Medicaid’s 60-month look-back, and it keeps the home outside the probate estate that Medicaid Estate Recovery can reach. It is one of the cheapest and most effective home-protection tools in Florida elder law.
Bottom line: A Florida Lady Bird Deed is one of the very few estate planning tools that keeps your home outside the Medicaid Estate Recovery Program (MERP) after death while preserving your Medicaid eligibility during life. The Florida Department of Children and Families treats a properly drafted Lady Bird Deed as a non-transfer under its Medicaid eligibility rules (ESS Policy Manual § 1640.0613.01), so it does not trigger the 60-month look-back. And because the property passes outside probate it falls outside the reach of Florida’s Medicaid Estate Recovery Act (Fla. Stat. § 409.9101).
What is at stake. Florida skilled nursing facilities averaged roughly $10,000 to $12,000 per month in 2025 (Genworth Cost of Care Survey). A Medicaid recipient in long-term care for two years can generate an estate recovery claim in six figures against their probate estate. A properly drafted Lady Bird Deed keeps the family home outside that probate estate. Every family’s numbers and eligibility are different. The point is that the exposure is real and the drafting solution is inexpensive.
How Florida Medicaid Estate Recovery actually works
When a Florida Medicaid recipient over age 55 dies, the state files a claim in the deceased’s probate estate for reimbursement of every dollar the state paid for that recipient’s long-term care (nursing home, hospice, home and community-based services). Under 42 U.S.C. § 1396p(b) and Fla. Stat. § 409.9101, the state’s claim has priority over most creditors and typically consumes the entire probate estate before family sees anything.
The MERP claim reaches everything that goes through probate. When the family home passes through probate, this is a common route by which Medicaid recovery claims consume most of the family’s inheritance.
Statutory exceptions that already limit MERP
Florida cannot enforce a Medicaid estate recovery claim if the recipient is survived by:
- A spouse
- A child under 21
- A child who is blind or permanently and totally disabled
See Fla. Stat. § 409.9101(4). The state may also waive recovery for undue hardship on a case-by-case basis. A Lady Bird Deed is what protects the home in the many families that don’t qualify for one of these statutory shields, and it removes the ambiguity even for families that do.
How the Lady Bird Deed defeats MERP
MERP can only reach probate assets. A Lady Bird Deed passes the property to the remainder beneficiary automatically at death, outside probate, by operation of the deed itself. The house is no longer in the probate estate, so MERP has nothing to file against.
Critical detail: this only works if the deed is drafted as a true enhanced life estate deed with the correct reserved-powers language. A regular quitclaim deed to a child does NOT protect the home, and it triggers the five-year look-back, disqualifying the parent from Medicaid.
Florida long-term-care Medicaid at a glance (2026)
- Individual income cap: approximately $2,829/month
- Countable asset cap: $2,000
- Home-equity cap: approximately $752,000 (the homestead is otherwise excluded while the applicant lives there or intends to return)
- Look-back period: 60 months
These numbers change annually. Verify with DCF at time of application.
Does a Lady Bird Deed trigger the Medicaid five-year look-back?
No. This is the second-most valuable feature of a Lady Bird Deed for Medicaid planning.
When someone applies for Florida Medicaid long-term care coverage, the state reviews the past 60 months of asset transfers. Any uncompensated transfer (a gift, effectively) results in a penalty period during which Medicaid will not pay. A one-year penalty can cost a family $120,000 or more in out-of-pocket nursing home fees.
A Lady Bird Deed is not a transfer for Medicaid look-back purposes because the grantor retains complete control over the property, including the unilateral right to sell, mortgage, or revoke the deed at any time. The Florida Department of Children and Families (DCF), which administers Medicaid eligibility, has consistently treated Lady Bird Deeds this way for over 20 years. The Enhanced Life Estate Deed appears explicitly in Florida’s ESS Policy Manual § 1640.0613.01 as a non-countable transfer.
| Deed type | Triggers Medicaid look-back? | Reachable by MERP? |
|---|---|---|
| Lady Bird Deed | No | No |
| Quitclaim deed to child | Yes, causes penalty period | No (already transferred) |
| Traditional life estate deed | Yes, transfer of remainder counts | No |
| Will (no deed) | No | Yes, probate reaches everything |
| Revocable living trust (self-settled) | No | No (but $1,500 to $3,500 to set up) |
Bonus benefit: full step-up in basis at death
Because a Lady Bird Deed keeps the property in the grantor’s taxable estate for federal income tax purposes under IRC § 2036, the remainder beneficiary receives a stepped-up basis equal to fair market value on the date of death (IRC § 1014). A home bought for $60,000 decades ago and worth $400,000 at death passes to the child at a $400,000 basis, eliminating capital gains tax if the child sells promptly. A quitclaim deed to a child during life does not produce this result. The child inherits the parent’s original basis and can owe six figures in capital gains tax on sale.
Does the homestead exemption also protect against MERP?
Partially, and the answer depends on who inherits. Florida’s constitutional homestead protection (Fla. Const. Art. X, § 4) shields the home from most creditors during life, and when the home descends to a surviving spouse or lineal descendant it generally passes outside the probate estate and outside MERP’s reach as well (see Snyder v. Davis, 699 So. 2d 999 (Fla. 1997)). The problem is that this protection is fact-dependent, has to be established in probate court, and can be lost if the will devises the homestead outside the constitutionally protected class or if there is no qualifying heir.
A Lady Bird Deed sidesteps that litigation entirely. The property passes to the named beneficiary by operation of the deed, so the family never has to ask a probate judge whether homestead protection applied.
When should I get a Lady Bird Deed for Medicaid planning?
The best time is while you are still healthy and clearly not applying for Medicaid. A deed prepared five years or ten years before any nursing home need is bulletproof. Deeds prepared closer to an application (or during a Medicaid application) can invite scrutiny even though they are technically not a countable transfer.
That said, we regularly prepare Lady Bird Deeds for clients who are actively planning for Medicaid or whose spouse is already in a facility. The deed still works. It just requires more careful documentation of the grantor’s intent to preserve control.
Situations where a Lady Bird Deed is especially valuable
- You are 65 or older and Florida is your primary residence
- Your spouse or you may need nursing home care in the future
- You want your home to pass to children or grandchildren
- You want to keep control of your home during your life
- You do not want the added cost and complexity of a revocable living trust
- You have already applied for or are receiving Florida Medicaid long-term care benefits
What Lady Bird Deeds do NOT do
Honest limits. A Lady Bird Deed is not a universal Medicaid planning solution.
- It does not help you qualify for Medicaid if you are over the countable asset limit or the home-equity cap. The deed protects the home after you are eligible, not before.
- It does not shield non-homestead investment property from creditors during your life. Only the homestead has constitutional protection.
- It does not work if your beneficiary predeceases you without a named successor. Contingent-beneficiary language is essential.
- It does not replace a will. You still need a will (or other planning) for all your other assets.
- It does not affect current property taxes. Your assessment does not change; your homestead exemption continues.
Community spouse considerations
When one spouse enters a nursing home and the other stays at home (“community spouse”), the Medicaid analysis gets more complex. The Minimum Monthly Maintenance Needs Allowance (MMMNA) allows the community spouse to keep enough income to live on, and the Community Spouse Resource Allowance (CSRA) protects a share of the couple’s countable assets. A joint Lady Bird Deed (both spouses as grantors) works well here because it preserves the community spouse’s control during life and passes the home outside probate at the second death. In cases involving spousal refusal, dual eligibility, or blended families, consult a certified elder law attorney about your specific situation.
When a Lady Bird Deed is NOT the right tool
- Out-of-state real estate. A Florida Lady Bird Deed only works for Florida real property. Other states either do not recognize the instrument or use different rules.
- Heavily mortgaged property with negative equity. The deed still works, but the estate planning benefit is smaller because there is little value to protect.
- Multiple contentious beneficiaries. A trust with a professional trustee can prevent litigation better than a deed to co-remainder-beneficiaries.
- Long-term-care insurance already in force with adequate coverage. If you have a strong LTC policy, MERP exposure is lower and other planning may take priority.
What happens if I need Medicaid AFTER I’ve done the Lady Bird Deed?
Nothing changes. Your home is still your home. You still live in it. You still own it. It still qualifies for the homestead exemption (which is one of the reasons Medicaid does not count it as an available asset for eligibility). And when you die, the property passes directly to your named beneficiary outside probate, so MERP cannot reach it.
The key legal doctrine here is that Medicaid eligibility rules treat the home as an unavailable asset while the recipient lives in it (or intends to return). A Lady Bird Deed preserves that treatment because the grantor’s occupancy and control are unchanged.
The 2016 policy discussion and current Florida DCF position
Some Medicaid planning attorneys mention a 2016 discussion around Florida rules that raised concerns about Lady Bird Deeds. The concern was clarified in the years since. Florida’s current position, reflected in the ESS Policy Manual § 1640.0613.01 and consistent CARES worker training, is that a properly drafted enhanced life estate deed is not a countable transfer. The critical words are “properly drafted.” A deed that inadvertently transfers current possession, or that reserves too little control, can be treated as a countable transfer.
This is why the drafting matters. Our attorney-prepared Lady Bird Deeds include the specific reserved-powers language that Florida DCF recognizes: the retained right to sell, convey, mortgage, or otherwise dispose of the property during life, without joinder or consent of the remainder beneficiary. That single paragraph is the difference between a deed that works and a deed that costs the family the home.
Frequently Asked Questions About Lady Bird Deeds and Florida Medicaid
Will a Lady Bird Deed protect my house from Medicaid Estate Recovery?
Yes, when properly drafted. The deed causes the property to pass automatically to the named remainder beneficiary at your death, outside probate. Because Florida Medicaid Estate Recovery only reaches assets that pass through probate, the home is beyond MERP’s reach. See Fla. Stat. § 409.9101.
Does a Lady Bird Deed count as a gift for Medicaid look-back purposes?
No. Because the grantor retains the unilateral right to sell, mortgage, or revoke the deed, no completed gift has been made. Florida DCF has treated Lady Bird Deeds this way consistently, and the Enhanced Life Estate Deed appears in Florida’s ESS Policy Manual § 1640.0613.01 as a non-countable transfer.
Can I get a Lady Bird Deed after applying for Medicaid?
Yes. The deed still works to keep the home out of probate and out of MERP’s reach, and it is still not a countable transfer under DCF’s own policy. Some Medicaid planning attorneys recommend additional documentation of intent in this scenario. Contact us if this is your situation and we can advise on the specific facts.
Will I lose my homestead exemption if I get a Lady Bird Deed?
No. Because you retain a full possessory life estate with unrestricted powers, the property remains your homestead under Florida law. The Save Our Homes cap continues to apply and you keep the Florida homestead exemption on your property taxes (a $25,000 base exemption plus up to an additional $25,000 on non-school assessments, per Fla. Const. Art. VII, § 6).
Can Medicaid demand I sell my house before it pays for a nursing home?
No, so long as you are alive and the home is your primary residence (or you intend to return to it). Florida Medicaid treats the homestead as an unavailable asset for eligibility purposes. This is true whether or not you have a Lady Bird Deed. What the Lady Bird Deed adds is protection at death, when MERP would otherwise file its claim.
What if my spouse and I both need nursing homes?
Preparing a joint Lady Bird Deed (both spouses as grantors, children as remainder beneficiaries) works. When the first spouse dies, the survivor takes full ownership by tenancy by the entireties (or joint tenancy with right of survivorship), depending on how the deed is drafted. Our joint spousal Lady Bird Deed uses tenancy by the entireties, which is the strongest form of Florida co-ownership for a married couple. When the survivor dies, the property passes to the beneficiaries outside probate, safe from MERP. Our $399 joint-grantor deed handles this exact scenario.
Can I still sell the house after signing a Lady Bird Deed?
Yes. You retain the unilateral right to sell, mortgage, or refinance the property. Your named beneficiary has no say and cannot block a sale. The deed only takes effect at your death, and only for whatever property interest you still own at that moment. Sell the house, spend the money, buy a condo, do whatever you want. The deed follows the property, not the person.
What is the total cost to protect my home from Medicaid Estate Recovery?
$349 for a single-grantor Lady Bird Deed, or $399 for a joint spousal deed, plus $10 to $50 in county recording fees. That is the entire cost of the protection, one-time, forever. See our complete Florida Lady Bird Deed cost breakdown.
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Reviewed by Long H. Duong, Esq., Florida Bar No. 11857, admitted 2005, founder of LD Legal, LLC. Over two decades of Florida probate and Medicaid planning experience. Last reviewed: August 2026. Sources: 42 U.S.C. § 1396p(b); Fla. Stat. §§ 409.9101, 733.6171, 733.617; Fla. Const. Art. X, § 4 and Art. VII, § 6; Florida DCF ESS Policy Manual § 1640.0613.01; Snyder v. Davis, 699 So. 2d 999 (Fla. 1997); IRC §§ 1014, 2036. This page is general information about Florida Lady Bird Deeds and Medicaid Estate Recovery. It is not legal advice for your specific situation and does not create an attorney-client relationship. Medicaid rules are complex and depend on your specific facts, marital status, income, other assets, and current health. For advice on your own Medicaid planning, order a deed through the intake form, contact LD Legal directly, or consult a certified elder law attorney.