Elder Law Report
Elder Law Report
Why Ladybird Deeds Now Strongly Protect North Carolina Homes From Medicaid
The rules just got clearer—and the stakes couldn’t be higher for families trying to protect a home while qualifying for long-term care. We break down how North Carolina’s Medicaid manual now explicitly recognizes Ladybird deeds (life estates with powers), why that matters during the five-year look-back, and how this strategy preserves eligibility without triggering transfer penalties. If you’ve worried about losing your house to care costs or probate, this is your blueprint for legal protection that holds up under scrutiny.
We walk through the core mechanics of a Ladybird deed: the owner keeps full control, including the power to sell, while naming a remainder beneficiary to inherit the property at death. That retained control is the key—because it’s not a transfer for less than fair market value, the deed avoids penalties that can derail Medicaid applications. Pair it with the home site exemption and a signed intent to return, and you have a clearer path to eligibility while still protecting the family residence. We discuss how the manual’s citations solidify this approach for nursing home care and special assistance, creating consistent guidance across programs.
Beyond eligibility, we explore the real benefits for legacy planning: avoiding probate, reducing delays and costs, and keeping equity in the family for children and spouses. Married couples can use this tool on a primary residence, and families with farms or condos can preserve assets that mean more than a balance sheet. We share on-the-ground insights from appeals and client outcomes that helped drive policy clarity, and we explain when to use Ladybird deeds alongside powers of attorney and other planning tools for a comprehensive, resilient plan.
If home is your anchor asset, you don’t have to choose between care and legacy. Learn how a properly drafted Ladybird deed can protect your equity, streamline inheritance, and meet Medicaid rules with confidence. Subscribe for more clear, practical elder law guidance, share this with someone who needs it, and leave a review to help others find these resources.
Ladybird deeds stronger than ever in North Carolina. So excited that in September of this year, it is written in the new long-term care Medicaid manual,\ MA-2240. The Ladybird Deed has been written into their manual, codified in that manual, in section 10C6. I want to clear up and explain any confusion around Ladybird deeds and tell you why they're stronger than ever in North Carolina today than they ever were. In the manual, it clearly states that since the lifeholder, estate holder, retains the power to sell the property, that it's not counted as an asset transfer. Ladybird deed or life estate with powers, the owner of the property creates a life estate for themselves, retaining the power to sell the property with the remainder of interest to someone else, like the child. Since the life estate holder retains the power to sell the property, its value as a resource is its full equity value. In this situation, the individual has not transferred anything of value. That's why it's not a valuable transfer. It's not, it doesn't violate the transfer rule. So even within the look back period of five years to apply for long-term care Medicaid, which pays for skilled nursing care, as we call nursing home care, or two-in-home care benefits, pace and cap. It does state in the last subsection of this article that's written in the long-term care medicaid manual, this section or subsection, instead of the full value of the asset, is considered as a countable resource to the individual, the applicant. And then it says, assuming, of course, that it is not otherwise excluded as a resource. And it is excluded. We always do ladybird deeds on the primary residence for these purposes, the home site, as the manual refers to it. And the home site is exempt because it's the home site. And then the applicant has an intent to return home that we file when we file the application, which makes it exempt. So the Ladybird deed is stronger than ever in North Carolina. It passes the asset outside of probate. It is an amazing, efficient way to protect your home, especially in the face of needing long-term care, and make sure that it passes to your loved ones, for example, your children, and stays in the family. A married couple can do a ladybird needle in a house. I'm so proud of the work we do at McIntyre Elderlaw. I'm proud of the work that I've done. I feel so good about saving people's homes. I had an appeals case in Henderson County a number of years ago, which is the reason why the Attorney General wrote in that division, Department of Health and Human Services, wrote into the special assistance manual that pays for assisted living care. That's the benefit special assistance. That Ladybird deeds are also codified in their manual and has been for a long time. Now we have it codified in and written into the long-term care Medicaid manual for nursing home care also. I'm so proud of our firm. I'm proud of all the attorneys out there that are fighting this fight. And I want to clear up Ladybird deeds are stronger than ever in North Carolina. And man, are they a powerful tool? Literally has saved millions upon millions of dollars in property for our clients. It's a large number, and I'm very proud to say that we've kept it in the family. We've kept the home sites and the farm and the apartment, I mean the condos, the primary residences in the family using Ladybird Deeds. I hope that I've helped clear up any misconception. If you ever need to meet with myself or one of our attorneys, be glad to discuss it. We believe in it so much. We would offer a free consult to discuss your estate plan and planning like this. You can take advantage of that by calling 1 888 999 6600 or schedule directly on my calendar at mcelderlaw.comslash scheduling. Thank you.