A Michigan lady bird deed is a type of life estate deed that allows a property owner to retain control over Michigan real estate during his or her life and automatically transfer the real estate at his or her death. The property transfer occurs automatically at the owner’s death, without probate. Until the owner’s death, the owner can change his or her mind about the deed Michigan lady bird deeds allow the current owner to name a future owner who will take title when the current owner dies, but the current owner keeps complete control over the property for life. The current owner (called the life tenant after creating the deed) can still sell, mortgage, or transfer the real estate and can also make changes to how the real estate eventually transfers under the lady bird deed.

A Michigan ladybird deed form works by dividing ownership into a lifetime interest (the life estate) and a future interest (the remainder). A property owner who creates a Michigan ladybird deed typically reserves the life estate—which allows the owner (or life tenant) to continue owning the property for life. The ladybird deed also identifies at least one other party—called a remainderman or remainder beneficiary—who will receive the real estate outside probate upon the life tenant’s death. The deed may designate multiple remainder beneficiaries, and the remainder beneficiaries may include people, trusts, or organizations. The life tenant retains lifetime ownership and also reserves substantial powers over the property—including the right to sell, gift, mortgage, or otherwise dispose of the property without the remainder beneficiary’s involvement. The life tenant also has the ability to change his or her mind about the ladybird deed and do something different with the property. These continuing powers over the property are what makes the life estate enhanced. If the life tenant still owns the property at death, the property transfers to the remainder beneficiary automatically, without the need to probate the property. While the life tenant is still alive, the remainder beneficiary has no vested rights in the property, so the life tenant does not need the remainder beneficiary’s consent to sell or otherwise dispose of the property during life. This feature is what separates an enhanced life estate deed from a traditional life estate deed.

Michigan lady bird deeds have several benefits that make them a valuable estate-planning tool for Michigan property owners who want to arrange for an efficient property transfer at death. Avoid Michigan probate. Avoiding probate is a chief objective for most people who use Michigan lady bird deeds. A properly drafted Michigan lady bird deed passes the property automatically to the remainder beneficiaries when the life tenant dies—bypassing the complex and often expensive probate process. Retained control. Owners generally prefer to keep control of their property while they are still alive. A traditional life estate deed surrenders some of the owner’s power over the property. A Michigan lady bird deed avoids this problem by giving the owner (life tenant) the continuing right to sell, mortgage, or gift the property without involving the remainder beneficiaries. Medicaid asset protection. The Michigan Department of Health & Human Services—the agency that administers Michigan’s Medicaid program—has expressly approved the use of lady bird deeds.1 A transfer by lady bird deed is not considered a “divestment” when calculating the Medicaid penalty period for purposes of qualifying for nursing home care. Property transferred by lady bird deed is not part of the probate estate, so it is not subject to Medicaid recovery after the owner’s death. Tax savings. A Michigan lady bird deed does not result in a complete transfer during the owner’s life for tax purposes because the owner retains control over the property. No federal gift tax return is required, and there are no federal gift tax consequences. When the owner dies, the property is included in the owner’s taxable estate—which lets the property qualify for a basis step-up at death. The basis step-up effectively erases any appreciation that has accrued in the property and can save capital gain taxes. Property tax benefits. A Michigan lady bird deed is not considered a transfer of ownership for property tax purposes. The lady bird deed does not result in a reassessment of the property or “uncap” the property’s taxable value.2 Retained homestead exemption. A Michigan lady bird deed does not affect the owner’s homestead (principal residence) exemption during the owner’s life. Property that qualifies for homestead exemption before the transfer continues to be eligible for homestead exemption after the transfer. Reduced legal fees. A living trust provides many of the same benefits as a lady bird deed but requires additional cost and complication. A lady bird deed can accomplish many of the same objectives as a living trust—including retained control during life and probate avoidance at death—without the complication of a living trust.

Sydney takes pride in delivering her clients with custom estate plans quickly and efficiently. For a Deed Package or Powers of Attorney, your review/signing meeting is generally held within 7-10 days from the time she has the necessary information. For a Will or Trust Package, your review/signing meeting is generally held within 2-3 weeks from the time she has the necessary information.

Sydney will conduct a free 30-minute consultation with you to evaluate your needs first, and give a recommendation as to what kind of estate plan (if any) would be best suited for you. Once you decide on the documents and/or package you would like, you both sign a Representation Agreement that details what all you will receive for a flat-fee price. Pricing can be found in the detailed Price List below, so there are no surprise fees or cost increases. When you sign your Representation Agreement, 50% of the flat-fee is due in order for Sydney to prepare your documents, and the other 50% is due at your review/signing meeting when your documents are finalized. Alternative payment plans can be arranged upon request; however, final payment is due at the time the documents are signed/completed.

If you have not already done Estate Planning, Sydney does not require you to bring any documents or statements to your initial meeting. Instead, she recommends you simply consider: Who do you wish to benefit if you passed away? Would you want them to receive a specific asset or a share* of your estate? *Please Note: If you have multiple beneficiaries, it is best to consider distributions in fractions or percentages of your entire estate, and not specific dollar values. If your assets increase or decrease during your lifetime and you have specific $ amounts listed, this may result in unintended consequences. If a beneficiary is unable to receive that asset or their share, where would you want it to go instead? Who do you want to be responsible for carrying out the distributions you make? If that person is unable to do so, then who? Is there a person or persons you trust to help you if you needed assistance with your financial affairs? Medical decision-making? If they are unavailable, then who?

The value of your assets is relative, and what may not be “a lot” to you, may be to another. In truth, the value of the estate is not really important - if you do not take steps to plan for it, a small estate can cause a much bigger headache for your loved ones than a larger one that likely has the funds to fix it. Do not let your “smaller” estate get eaten up by court costs and attorney fees - in most cases there are very simple things you can do to ensure that whatever you have transfers easily upon death.

Not necessarily. Trusts are often more about who you want to benefit and less about you. If your beneficiaries are adults and do not require special terms for their inheritance, a trust may not be necessary. Trusts are great tools for people with minor children, beneficiaries who should not inherit outright, or for long lists of beneficiaries and/or properties, but Sydney does not recommend this unless it is really necessary for you.

Probate is the court process by which the property of a person who has died is distributed. Estate administration after a person's death involves gathering the assets of the estate, paying debts & final expenses, and distributing remaining assets. And, no. A Last Will and Testament tells the Probate Court where the decedent wanted their asset(s) transferring through the Court to go, and who they nominated to serve as the Personal Representative (executor) of the estate. Assets that are jointly-owned, have direct pay-on-death beneficiaries designated, or are titled in the name of a trust, are considered non-probate assets and generally transfer directly to the joint owner, beneficiaries, or trust, without need for court documents or filings. When a person dies with an asset titled solely in their own name, without any transfer designations, that asset often will require transfer through the court process, a.k.a. probate estate administration.

Estate planning documents are truly a gift to your loved ones. By providing legal instructions and designations for your estate, it reduces confusion, conflict, and costs. For example, by paying $500 for a deed on the front end, you can save your beneficiaries $5,000+ on the back end, when it comes time to legally transfer your home after death. By paying $600 for Powers of Attorney on the front end, you can save your loved ones from having to go to court to open a guardianship or conservatorship to step in to help you (often costing $2500+ in legal/court fees). Although costly, estate plans pay for themselves many times over when they are done right, and hiring an attorney to prepare and execute the documents with you ensures they are legally-sound and accurate the first time. There may be “deals” to be had elsewhere, but when handling the deed to your land or your hard-earned assets, we sincerely caution against taking shortcuts. HPPG’s Price List has a built-in discount for our clients already, because we truly care and want estate planning to be affordable to all. If it seems unaffordable to you, please utilize our free 30-minute consultation at the very least for some guidance and advice!

If you put down a deposit, we will proceed with drafting the documents that you ordered. Therefore, deposits are nonrefundable.