Also, if a homestead is placed in a revocable living trust, it changes the resource to being countable under the Medicaid rules in Texas. It should be noted that although trusts (both revocable and irrevocable) avoid probate, the cost for establishing is often far greater than preparation of either type of deed – although trusts usually provide more planning protection. Although a homestead is a non-countable resource when applying for Medicaid (assuming the equity value is under $603,000 in Texas if single – no limit if married), the state will attempt to make a claim (not a lien) against the property after the Medicaid recipient’s death. Medicaid often helps pay for long-term care costs (such as nursing home care costs, drugs, care at home, etc.) and many may rely on Medicaid due to lack of coverage by Medicare, long-term care insurance, and/or inadequate income or resources. Both Ladybird Deeds and Transfer on Death Deeds should result in a withdrawal of a claim for Medicaid benefits paid since the homestead would pass outside probate which is an exception under the Texas Medicaid rules. If probate is avoided, then it should result in avoiding a successful claim by the state (this varies from state to state) for Medicaid payments advanced on behalf of a Medicaid recipient. Costs and delays and potential problems of property passing by Will or by intestacy could be avoided by Ladybird Deeds and Transfer on Death Deeds (although beware of title issues with Transfer on Death Deed).Ģ. This could be particularly burdensome and costly if there are debts owed by the estate or if there are numerous heirs (and possibly unknown heirs). ![]() If one doesn’t have a Will or Trust, then the property will pass according to the laws of the state. If one has a Will, then often probate is needed – the judicial process of having the Will approved prior to the transfer of the property to the desired beneficiary or beneficiaries. There are numerous reasons why these deeds are commonly used including: The owner of the property can change the names of the beneficiary during the owner’s life. In both types of deeds, the owner of the property retains control during life and the property then passes to the named person(s) or trust as set forth in the deed upon death of the owner. (2) Unless the owner designates otherwise in a beneficiary deed, a beneficiary deed shall not be deemed to contain any warranties of title and shall have the same force and effect as a conveyance made using a bargain and sale deed.In a battle of the two most common probate avoidance deeds, it is often (but now always) better in Texas to use a Ladybird Deed (which is an enhanced life estate deed) than a Transfer on Death Deed. IT REVOKES ALL PRIOR BENEFICIARY DEEDS BY THIS GRANTOR FOR THIS REAL PROPERTY EVEN IF THIS BENEFICIARY DEED FAILS TO CONVEY ALL OF THE GRANTOR'S INTEREST IN THIS REAL PROPERTY.-WARNING: EXECUTION OF THIS BENEFICIARY DEED MAY DISQUALIFY THE GRANTOR FROM BEING DETERMINED ELIGIBLE FOR, OR FROM RECEIVING, MEDICAID UNDER TITLE 26, COLORADO REVISED STATUTES.-WARNING: EXECUTION OF THIS BENEFICIARY DEED MAY NOT AVOID PROBATE. IT DOES NOT TRANSFER ANY OWNERSHIP UNTIL THE DEATH OF THE GRANTOR. ![]() , State of Colorado:-(insert legal description here)-Known and numbered as ![]() ]and grantor transfers, sells, and conveys on grantor's death to the grantee-beneficiary, the following described real property located in the County of. Successor grantee-beneficiary whose address is ![]() Grantee-beneficiary whose address is - (Note to Assessor and Treasurer: This address is for identification purposes only, all notices and tax statements should continue to be sent to grantor.)-(Optional)[or if grantee-beneficiary fails to survive grantor, grantor designates -, as. (§ § 15-15-401 et seq., Colorado Revised Statutes) CAUTION: THIS DEED MUST BE RECORDED PRIOR TO THE DEATH OF THE GRANTOR IN ORDER TO BE EFFECTIVE. A beneficiary deed may be in substantially the following form: (1) An owner may transfer an interest in real property effective on the death of the owner by executing a beneficiary deed that contains the words "conveys on death" or "transfers on death" or otherwise indicates the transfer is to be effective on the death of the owner and recording the beneficiary deed prior to the death of the owner in the office of the clerk and recorder in the county where the real property is located.
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