Long term care in a nursing home can be very expensive. If you do not plan properly, you can lose most of your assets before Medicaid will start paying for your care. Because you do not know whether or not you will need it, planning for the possibility of long term care should be a part of your overall estate plan. You have several options to plan for long term care. In Texas, you even have a unique option that is not available in most other states.
In Texas, you can use a particular type of enhanced life estate deed known as a “Lady Bird Deed.” It gets its name as it is what former President Lyndon Johnson used for his own estate. Basically, this deed gives you a life estate in your home and the home automatically passes to a beneficiary upon your death. However, there are certain advanced features. You can still control the property and sell it without the consent of the beneficiary, which is unlike a traditional life estate. Perhaps most importantly to most people, the home is exempt from Medicaid claims during your lifetime.
A Lady Bird deed is not right in every situation. It is one tool out of many that an estate planning attorney has to assist you in planning for the eventuality of long term nursing home care.