A Medicaid claim can reach $400,000 after a parent's nursing home stay. A lady bird deed keeps the Florida house out of probate, so it stays out of reach.

Does a lady bird deed protect a Florida home from Medicaid estate recovery? Florida Statute 409.9101 lets the Agency for Health Care Administration collect only by filing a claim against the probate estate, so any asset that passes outside probate stays out of reach. An enhanced life estate deed, the lady bird deed, keeps the home out of probate while the owner keeps full power to sell, mortgage or revoke it. A plain gift of the house instead triggers Florida's sixty month Medicaid look back and a penalty measured against the $10,645 divisor, months of coverage a family cannot afford at $11,000 to $12,000 a month for nursing home care.

Can a lady bird deed be contested? Florida's Fourth and First District Courts of Appeal have both ruled on deeds where the reserved powers were drafted incorrectly, so the words on the page decide whether the deed holds.

Does a lady bird deed have to be recorded? Recording sets the chain of title the remaindermen rely on at death.

StepUpLaw carries the statute, the DCF policy manual citations and the case law behind this in a full guide.

Transcript

The claim shows up on day eighty-eight of the probate. The family published the notice to creditors in the spring, the way part seven of chapter 733 requires, and before the ninety days ran out the Agency for Health Care Administration filed a statement of claim for every dollar Medicaid paid for their mother’s nursing home care after she turned fifty-five. Nursing home care in Florida runs about $11,000 to $12,000 a month right now, so three years of it puts the claim close to $400,000. The only asset in the estate is her house. Nobody in that family did anything wrong. She qualified honestly, the state paid what it agreed to pay, and section 409.9101 sends the bill at the end.

Will Medicaid take the house after she is gone. Three things settle it. The first is what the claim can reach, which is the probate estate and nothing else. The second is why giving the house away early costs you nineteen months of coverage instead of saving the house. The third is what a lady bird deed does instead, and which accounts still land in probate no matter what you do with the deed.

Here is what the statute actually says, because the mechanics matter more than the fear. Accepting Medicaid creates a debt to the agency in the total amount paid for the recipient after age fifty-five, and benefits paid before fifty-five create no debt at all. That is section 409.9101(3). Then subsection (2) gives the state exactly one way to collect, which is filing a statement of claim against the estate of the deceased recipient in the probate proceeding. Nothing happens to the house while she is alive. The collection is a creditor claim in a probate file, and it has to be filed within ninety days of first publication of the notice to creditors under section 733.702.

That single sentence in subsection (2) is where all the planning lives. Florida recovers from the probate estate and from nothing else. Federal law at 42 U.S.C. 1396p(b)(4)(B) gives every state the option to define the estate more broadly and reach revocable trusts, joint tenancies and life estates, and Florida has not taken that option. So the only question that matters for a family is which assets fall into probate at death.

The house is where families get this wrong, and they usually get it wrong while trying to fix it. Somebody tells them to give the house to the kids now. A gift of the home is a transfer for less than fair market value, and Florida looks back sixty months from the Medicaid application for exactly that. The penalty is the value you gave away divided by the state divisor, which is $10,645 in 2026, so a $200,000 house gifted to the children buys about nineteen months with no Medicaid coverage. The penalty clock is the part that hurts. It starts on the later of the transfer date or the day the applicant is otherwise eligible, meaning she is in the facility, under $2,000 in countable assets, and would qualify except for the gift. Nineteen months of care at $11,000 a month, with the house gone and nothing left to sell, is how a family ends up in my office with no good options.

A lady bird deed does the thing they were trying to do, without any of that. Its real name is an enhanced life estate deed. The owner keeps a life estate plus the express power to sell, mortgage, lease, convey and revoke, without asking the remaindermen and without telling them, and the property passes at death to the people named on the deed, outside probate. Florida’s Department of Children and Families says in its own policy manual, at section 1640.0613.01, that if an individual retains life estate using a lady bird deed or life estate with powers, no transfer has occurred. The manual gives the reason in the next sentence, which is that the individual retains full ownership powers in the property and it is only upon their death that ownership transfers to the remainderman. Section 1640.0305.03 says the same thing from the other direction, that the enhanced life tenant has the same rights as complete ownership including the right to sell without the remainderman’s consent. Nothing of value left her hands, so there is nothing to penalize. The client can record the deed on Monday and file the Medicaid application on Tuesday.

The words on the page decide all of this. A plain life estate deed, the kind without the reserved powers, is a penalized transfer, and the manual values it by multiplying fair market value by the remainder interest factor for the owner’s age. The Fourth District in Varano in 2025 looked at a deed that left the enhanced powers out and held the survivor had a life estate, no more and no less, with no power to sell and no right to any proceeds. Run the title before you draft, too. The First District in Johnson in 2025 dealt with lady bird deeds prepared for parcels the trust already owned and signed by the owners individually. Reformation saved the deeds. The malpractice posture was a separate conversation. On a clean one the documentary stamp tax is seventy cents, the statutory minimum, unless the property is mortgaged and the beneficiaries take it subject to the loan.

Now the part people skip, which is what recovery still reaches after death. The deed protects the house and stops there. Everything else that lands in probate is available to the claim. A checking account with no payable-on-death beneficiary is in probate. A brokerage account with no transfer-on-death registration is in probate. An IRA that names “my estate” instead of a person drops the entire balance into probate, which is the one place the agency can touch it. So is the car and so is the personal property. And the house comes back into play if a later deed, a refinance or a reverse mortgage overrode the lady bird deed after it was signed, which happens quietly and may not surface on a routine title search.

Some claims are barred outright, and it is worth knowing which. Section 409.9101(6) says the debt is not enforced if the recipient is survived by a spouse, by a child under twenty-one, or by a child who is blind or permanently and totally disabled. Subsection (7) bars enforcement against property that is exempt from creditors under the Florida constitution. Subsection (8) is the hardship waiver and the criteria are narrow. One is an heir who lived in the residence for the twelve months before the death and owns no other home. Another is a child or sibling who provided full time care that delayed the nursing home admission and lived with the recipient at least a year. The statute also says out loud that a hardship does not exist solely because recovery will prevent an heir from receiving an anticipated inheritance.

This week, pull your recorded deed and read the paragraph that follows the legal description. If it does not reserve the right to sell, mortgage, convey and revoke without the remaindermen joining, what you own is a plain life estate, and that costs you control today and creates a look back penalty later. If you are married and the home is titled in one name, the other spouse has to join under section 732.7025 before the remainder can go to children. Bring the deed, the last five years of bank statements, and the beneficiary designation on every account, and we will tell you which of them is headed for probate. We prepare these deeds and run the Medicaid analysis at Assouline & Berlowe in Miami.

Read the full guide at stepuplaw.com/florida-ladybird-deed-medicaid-planning

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Stepping Up is hosted by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. Episodes are general information about Florida law, not legal advice, and listening does not create an attorney-client relationship.

Lady Bird Deeds, the Medicaid Look Back, and Estate Recovery

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Lady Bird Deeds, the Medicaid Look Back, and Estate Recovery

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