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Selling a home under the Lady Bird Deed.

Lansing, MI |

If the grantor of a Lady Bird Deed in Michigan decides to sell their home at the time of being put in assisted living,can the grantor give that money to the grantees of the deed without a claim being made by the State to obtain the money from the sale of the home?

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Attorney answers 4

Posted

No. That's a divestment. The state won't make the claim, though, they'll impose a penalty period. It's the nursing home that won't get paid that'll be suing your mom and then you (under a fraudulent conveyance theory). If you wish, you may drop me a email to discuss further...

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Posted

Mr. Carrier is right on point. This would be a big mistake.

Posted

Unlike a life estate, a Lady Bird Deed is a testamentary transfer deed meaning title doesn't change hands until the grantor dies. At any time before their death the grantor can execute a new deed replacing the grantee or terminating the testamentary transfer. As a result it is still an asset or resource for which Medicaid needs an accounting. The steps you describe won't work because it is still a transfer for less than fair value.

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Posted

What you are trying to accomplish can - for the most part - be done, but not in the manner you are suggesting.

To be clear, execution of a LBQCD by itself is NOT a divestment, because it is not a completed transfer of ownership. However, the disclaiming of proceeds from the sale of a home would be a divestment.

I would suggest getting an opinion from more than one attorney on this matter.