A Lady Bird Deed is a straightforward and inexpensive way to transfer real property at death. With a Lady Bird Deed, one may retain complete control of the property during one's lifetime but at one's death, the property is transferred directly to those named on the deed. This is similar to the way an investment account or bank accounts may list a "beneficiary."

To see how it works, let's take your home as an example. You own your home (whether you have a mortgage or not). When you sign a Lady Bird Deed, you retain the power to sell, mortgage, gift (or otherwise transfer) your home during your lifetime. Although you don't convey your home during your lifetime, the Lady Bird Deed identifies who receives your home after you die, and the ownership automatically transfers to whoever is named. This can be one or more individuals, or it can be a trust.

Benefits Of A Lady Bird Deed

At Creighton McLean & Shea PLC, we have can help you benefit from a Lady Bird Deed transfer. And just what are the benefits of a Lady Bird Deed in Michigan? Here are the main ones:

  1. Lady Bird Deeds avoid probate. The property goes directly where you want it to go, without getting the Michigan probate court involved. This can save a family thousands of dollars.
  2. Lady Bird Deeds are Medicaid friendly. If your home is in a trust, it is "countable" for Medicaid purposes, so you might be disqualified from Medicaid just because your trust owns the house. A Lady Bird Deed avoids this problem: when the house is in your own name, it is not a "countable asset" for Medicaid purposes. This can save a family a great deal of money when a loved one is requires a nursing home care.
  3. Lady Bird Deeds are tax friendly. Since there is no "gift" during your lifetime (the transfer only occurs at death), the person receiving the property gets what is known as a "step up in basis". In short, there should be no income tax on the sale of your property after you die.
  4. At this time, a Lady Bird Deed Avoids Michigan Estate Recovery. After you die, Michigan's recent estate recovery law allows the government to take your home under certain circumstances if you received Medicaid benefits during your lifetime. A Lady Bird Deed is a great way to avoid estate recovery under current law.
  5. You don't give up any control. You can still do whatever you want with your property during your lifetime. And you can change it or take it back at any time.

A Lady Bird Deed can be a great estate planning strategy when combined with your other estate planning (for example, Trust, Will, Durable Power of Attorney, Health Care Power, etc.).

To see whether the use of a Lady Bird Deed makes sense with your estate plan, schedule a visit with one of our experienced estate planning attorneys or call 734-245-9289 for more information.