A "Lady Bird deed" (also known as an enhanced life estate deed) is a way to transfer property to someone else outside of probate while retaining a life estate in the property. But unlike a regular life estate, a Lady Bird deed gives you the power to retain control of the property during your life, including the right to use the property for profit or to sell the property.
Lady Bird deeds can be very beneficial if you want to pass your home to someone else but may need to apply for Medicaid soon thereafter. In order to qualify for Medicaid, an applicant cannot have transferred property within five years of the application. Because a Lady Bird deed allows you to retain control of the property, depending on the state it may not count as a transfer of assets for Medicaid eligibility purposes. In addition, these deeds can help avoid estate recovery. After a Medicaid recipient dies, the state can make a claim for repayment of benefits from the recipient's estate. Because property under a Lady Bird deed passes outside of probate, it won't be subject to a claim for reimbursement in states that make claims only against probate property.
Lady Bird deeds are not legal in most states, so you need to talk to an attorney to find out if you can use one in your state.
What about the deed’s name? According to Texas Tech professor Gerry W. Beyer, the Florida lawyer who created this form of deed in the 1980s explained the concept by using the names of President Lyndon B. Johnson’s family, and the name stuck.