When planning for the future, especially in terms of estate planning and long-term care, many Rhode Island homeowners may come across the term “Lady Bird Deed.” While it is a more playful term that much of the typical legal terminology, it is a concept that causes some confusion. What is a Lady Bird Deed, and can it help protect my home?
A Lady Bird Deed, also called an Enhanced Life Estate Deed, is a legal tool that allows you to transfer your home to a beneficiary while still maintaining control of the real estate during your lifetime. Although these deeds are sometimes used in other states for Medicaid planning, Rhode Island treats them with much more scrutiny when determining Medicaid Eligibility. Understanding how they work here is important before including one in your estate plan.
What Does a Lady Bird Deed Do?
A Lady Bird deed allows the current owner, known as the Life Tenant, to:
- Retain the right to live in the property for the rest of their life
- Continue paying property taxes, insurance, and maintenance
- Retain the right to sell or mortgage the home at any time without the consent of the future owner, known as the remainderman
- Collect all proceeds from the sale of the property during their lifetime
- Cancel or revoke the Lady Bird Deed
- Change the named beneficiary as Remainderman
This is different from a traditional Life Estate Deed, where the Remainderman has a fixed legal interest in the home. In that case, if the property is sold, the proceeds are split based on life estate valuations, which are calculated using the age of the life tenant. Further, in order to sell or mortgage the home, the Life Tenant would need the Remainderman to agree to such sale.
Can Medicaid Take Your House If You Have a Lady Bird Deed in Rhode Island?
This is a common question among Rhode Islanders trying to protect their home from Medicaid Estate Recovery. Unfortunately, the short answer is yes… Medicaid can make claims against your home after your death, even if you have a Lady Bird Deed.
Why? Because in Rhode Island, the Department of Human Services (DHS) treats a Lady Bird Deed differently than some other states. Since the individual who creates the Lady Bird deed retains full control over the property, including the power to revoke the deed, sell the property, or change beneficiaries, the home remains part of the individual’s Estate and is a countable resource for Medicaid purposes. This means it is subject to Medicaid estate recovery after death. This is why relying on a Lady Bird deed for Medicaid planning in Rhode Island can be a costly mistake. If your goal is to keep your home out of Medicaid’s reach, a more protective approach like transferring your home into a properly drafted Irrevocable Trust may be a viable strategy.
Lady Bird Deed vs.
Traditional Life Estate Deed in Rhode Island
| Feature | Lady Bird Deed | Traditional Life Estate Deed |
| Control During Lifetime | Full control (can revoke or sell property) | Limited control (Remainderman has legal rights) |
| Consent Required to Sell | No | Yes, Remainderman must agree |
| Probate Avoidance | Yes | Yes |
| Medicaid Protection in RI | No | Potentially, if structured correctly |
| Flexibility | High | Low |
Should You Use a Lady Bird Deed in Rhode Island?
While a Lady Bird deed can provide flexibility and help avoid probate in certain cases, it is by no means a one-size-fits-all solution. This is especially true when it comes to Medicaid planning in Rhode Island. If you are trying to preserve your home as part of a long-term care strategy, other legal tools such as an Irrevocable Trust may offer more protection based on your exact needs. A Rhode Island Estate Planning Attorney can help you determine the best path forward based on your unique circumstances.
Speak with a Rhode Island Estate Planning Attorney
Understanding your options starts with the right legal guidance. At McCarthy Law, we help families across Rhode Island create smart, personalized estate plans that reflect their goals and protect their assets.
If you are considering a Lady Bird deed or want to explore other ways to transfer your home while protecting your future, contact our East Greenwich office today.
About the Author
Attorney Daphne Hamilton is a compassionate Rhode Island Estate Planning Attorney dedicated to helping families create comprehensive plans that allow them to build their brightest future. Attorney Hamilton believes that a successful legacy plan starts with listening and empowering her clients to make decisions that align with their values by supporting them through every step of the estate planning process.