Short Answer

In North Carolina, a Lady Bird deed (an enhanced life estate deed) lets a homeowner keep full control of the property for life while naming who gets it at death, often avoiding probate. If you deed only a portion, the named person will co-own that portion at your death. This technique can help with planning but requires careful drafting, proper recording, lender review if there’s a mortgage, and attention to capacity and Medicaid rules.

Understanding the Problem

You want to know if your parent in North Carolina can deed a portion of her home to you using a Lady Bird deed to help with future care costs. The decision point is whether she can reserve lifetime control while naming you to receive part of the property at her death, and what legal consequences follow.

Apply the Law

A North Carolina Lady Bird deed is an enhanced life estate deed where the owner keeps the right to live in the home and also retains broad powers to sell, mortgage, or change beneficiaries during life. Because those powers are retained, the transfer of the future interest generally does not take effect until death and often avoids probate. If only a portion is deeded, the recipient will take that portion at death—typically as a tenant in common—subject to any existing liens. Recording is essential to protect against later purchasers and creditors. If the owner lacks capacity, a guardian may need court approval to convey real property.

Key Requirements

• Capacity and authority: The owner must understand the deed; if adjudicated incompetent, a guardian of the estate (or general guardian) must seek court approval before conveying real property.
• Correct form and recording: Use enhanced life estate language (retaining rights to sell, mortgage, and revoke) and record the deed with the county Register of Deeds to protect priority.
• Mortgage and due-on-sale: Review loan documents; some lenders may require consent when remainder interests are created, even if the owner keeps possession and control.
• Partial interest issues: Deeding a metes-and-bounds “portion” may trigger subdivision or mapping rules; deeding an undivided fractional interest creates future co-ownership (partition risk).
• Medicaid and estate recovery: An enhanced life estate is often treated as a transfer effective at death, but the home can still be counted for debts, and recovery rules target estate assets; the details and program rules can change.

What the Statutes Say

• North Carolina Gen. Stat. § 47-18 (Connor Act) – Unrecorded deeds are void against lien creditors and purchasers for value; record to protect title.
• North Carolina Gen. Stat. § 28A-15-1 (Assets for payment of debts) – Real property of the decedent can be used to pay valid claims unless excluded by statute.
• North Carolina Gen. Stat. § 108A-70.5 (Medicaid Estate Recovery) – The State may seek recovery from a recipient’s estate for certain Medicaid benefits.
• North Carolina Gen. Stat. § 35A-1251 (Guardian’s powers) – A guardian of the estate has defined powers over a ward’s property, subject to court oversight.

Analysis

Apply the Rule to the Facts: Because your parent has progressive dementia, confirm legal capacity before signing; if she lacks capacity, a guardian must seek approval through the Clerk of Superior Court. The existing mortgage means you should review any due-on-sale clause and get lender input before recording a deed. A properly drafted and recorded enhanced life estate deed for only a portion would give you that portion at her death, likely avoiding probate for that piece, but you would take subject to any recorded liens. Medicaid transfer penalties and recovery depend on program rules and whether the asset remains in the estate at death.

Process & Timing

1. Who files: The homeowner (or her attorney-in-fact with proper authority), or a court‑appointed guardian with court approval. Where: County Register of Deeds in North Carolina. What: An enhanced life estate deed (often called a Lady Bird deed) with precise legal description and reserved powers; record the original. When: Before any planned Medicaid application or care transition; recording is effective upon indexing in the Register of Deeds.
2. If capacity is in doubt, initiate a guardianship proceeding with the Clerk of Superior Court; if a guardian is appointed, seek an order authorizing the conveyance. Timeframes vary by county and case complexity.
3. After recording, keep the original and a certified copy. At death, the remainder beneficiary typically updates county tax records; no probate deed is usually needed for that portion if the Lady Bird deed was correctly drafted and recorded.

Exceptions & Pitfalls

• Using a standard life estate deed (without enhanced reserved powers) can be treated as a present gift and may trigger Medicaid transfer penalties.
• If the owner has been adjudicated incompetent, a guardian must obtain court approval before conveying real property; deeds without proper authority risk being set aside.
• Mortgage due‑on‑sale clauses: check loan terms and obtain lender consent as needed.
• Partial conveyances may require subdivision compliance or precise metes‑and‑bounds; errors can cloud title.
• Co‑ownership after death can lead to partition disputes; discuss how future expenses and decisions will be handled.
• If married, spousal rights may require consent to avoid future claims.

Talk to a Estate Planning Attorney

If you’re weighing a Lady Bird deed for part of a North Carolina home while planning for long‑term care, our firm can help you understand title, Medicaid, and recording requirements. Call us today.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.