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Enhanced Life Estate Deed

            The Enhanced Life Estate Deed is a simple way to transfer real estate to a beneficiary after you have died. Generally, any transfer made within 5 years prior to your medicaid application for long term care will incur a penalty. Please note the Enhanced Life Estate Deed is an exempt transfer. But only when transferring an already exempt asset like your Homestead.

 The Enhanced Life Estate Deed works much like a life insurance policy or retirement account which transfers property without the need for probate. Importantly, nothing changes while you are alive, as the Enhanced Life Estate Deed only becomes effective upon death. You can sell or mortgage the property, or even give it away, while you are alive. The person or persons you have designated to receive the property after you have passed away will not acquire the interest you own until after your deaths, and at that time, the property will be received subject to all mortgages, liens, encumbrances, and other interests to which the property is subject.

The Federal government requires that states seek recovery from Medicaid recipients; however, Texas is not as aggressive as other states when it seeks to recover assets. In fact, the current policy in Texas is to recover only from assets that pass to a person's estate. Therefore, when an Enhanced Life Estate Deed is used (or a "Lady Bird Deed"), the property will pass automatically to the beneficiaries named, and the State of Texas will not try to recover it. If Texas becomes more aggressive in its estate recovery efforts in the future, Enhanced Life Estate Deed s will not avoid Medicaid estate recovery.