Your mother should talk to a lawyer who does estate planning. Do it yourself estate planning can have serious pitfalls. The lawyer can point out the pitfalls.
At the present time, a ladybird deed transfers property upon death and without the need for probate. At the present time the home will not be counted as something that must be "spent down" by Medicaid.
I am licensed to practice law in Michigan and Virginia and regularly handle cases of this sort. You should not rely on this answer. You should consult a lawyer so you can tell the lawyer the entire situation and get legal advice that is precisely tailored to your case.
A lady bird deed can be used to avoid probate because it reseves a life estate in the property to the grantor along with the ability to cancel the transaction or mortgage or sell the property during her lifetime. However, putting the names of 5 people on the deed is probably not a good move. If any of the people are married men, you should also understand that their wives will have to agree with the five siblings (a feat in itself in some instances) before anything can be done with the property. It really sounds like your mother should establish a trust, set up a trustee and put her assets into a trust. You are wise to consider the medicaid issue based on the idea of disqualification and if there are alternatives to nursing home care. You really need to consult with an experienced Estate Planning/Elder Law attorney. If you need help locating someone in your area, I would be please to assist you with a recommendation.
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I generally think this is a bad idea and not a good use for Ladybird Deeds. A properly drafted Ladybird Deed will avoid Probate if everyone dies in the right order. What if one of the children die before Mom? Depending on how the deed is drafted, it may still go through probate for their share. Does Mom want the house to go to a deceased child's family, or to the surviving four children? Do you really want all five to be on the deed to the house after Mom passes? As a lawyer, I see that as a recipe for disaster. You may be surprised how often the family that gets along when the parent is living no longer gets along after the parent dies. Do any of the kids have financial trouble that could lead to a lien on the house?
Under current law the properly drafted Ladybird Deed would protect the house from Nursing Home Estate Recovery, but:
1) They may change that law, and
2) I have seen a lot of deeds titled "Ladybird Deed" that were not properly drafted.
Michigan Estate Planning Law Center
A ladybird deeds serves functionally to create a beneficiary on a house. The home owner names the people to take title to the property upon their death. The beneficiaries creditors have no claim on the home until the death of the homeowners. It avoids probate. The house is exempt from medicaid spenddown. It avoids medicaid estate recovery under current law. It is a wonderful tool. However, I give one caution. Under your facts, the deed would convey to 5 siblings. They will all have to agree on when to sell, for how much, and all sign the deed. This can be a very frustrating process where one needs money and wants to sell immediately and one doesn't need money and wants to sell when the price goes up. This is not majority rules. All must agree. If put into a trust, the trustee makes all the decisions.