A Michigan Lady Bird Deed is a simple estate planning tool used to pass real property to your heirs upon death. A lady bird deed is a type of deed that allows the Grantor or the person leaving the property to retain a life estate. A Lady Bird Deed avoids probate and passes to your named heirs automatically. Michigan lady bird deeds are also known as an enhanced life estate deeds.
A lady bird deed Michigan is an estate planning tool that has many advantages. An estate planning attorney can be of value in discussing if it can benefit you and your needs.
Talk to probate and real estate lawyer today!
A probate and real estate attorney can help explain the use of a lady bird deed and how it can benefit you. Bruce Law Firm has experienced lawyers who can review how a lady bird deed can help you and your heirs.
How did the lady bird deed get its name?
Lady Bird deeds, which have been around for 20 years, are an increasingly popular form of estate planning. President Lyndon B. Johnson conveyed the property to his wife, Lady Bird Johnson, using a Lady Bird deed. This estate planning used by President Johnson to his wife “Lady Bird” is how the lady bird deed got its name.
What is a Lady Bird Deed Michigan?
As discussed, the Michigan lady bird deed, also known as an enhanced life estate deed, is a type of contingent ownership interest in real estate. The property’s owner gives beneficiaries the right to own some or all of the property if and when it becomes available while retaining an enhanced life estate. Generally, the beneficiaries do not take an ownership interest in an estate until the property owner’s death.
The owner of this property also has the power to revoke or amend this lady bird deed at any time and for any reason. A lady bird deed is an estate planning tool that allows property owners to transfer and control their assets while still alive. The owner can still sell the property or move it because of how the lady bird deed is structured.
What is a traditional Life Estate Deed?
A traditional life estate deed creates a form of joint ownership in real property. In a life estate, one owner remains in the house until their death. This is similar to a lady bird deed. A lady bird deed is also known as an enhanced life estate deed.
A life estate can be used to avoid probate. It is a way to transfer your property while you are alive but retain the right to reside in the house until your death. There is no probate since the property was transferred before death.
Benefits of Using a Lady Bird Deed
There are many benefits of using ladybird deeds. Michigan ladybird deeds can be used to transfer real estate without going through probate. There are many advantages to this fact, including cost savings and Medicaid planning.
Lady Bird Deeds Avoid the time and expense of the Michigan Probate Process
One of the significant benefits of a Lady Bird Deed is that it helps you avoid Probate Court, which can be very expensive. A lady bird deed can eliminate the need to hire a probate attorney and start the Michigan probate process. Legal fees and executor costs have to be paid before your assets are fully distributed to your heirs. A ladybird deed can also be utilized to maintain the privacy of an individual’s estate. A Lady Bird deed avoids the need for probate as the property automatically transfers to your heirs.
Lady Bird deeds Protect your home from any Medicaid Look back after death
In Michigan, Medicaid Estate Recovery is a law that allows the State of Michigan to collect against the probate estate of a Medicaid recipient for money paid on their behalf. Lady bird deeds avoid probate; therefore, there is no probate estate. Without probate, there is no Medicaid recovers. This allows the family to keep the home safe from the state.
The Michigan Department has approved Health and Human Services’ lady bird deeds, an exception of sorts, to estate recovery. This means that your property will not be subject to Medicaid recovery when you die because of the use of the lady bird deed. This is because the lady bird deed transfers ownership automatically upon death rather than through probate.
Maintain Control of Your Property While You Are Alive
The Michigan lady bird deed is a beneficial instrument for anyone who wants to keep control of their property while still alive. A traditional life estate deed would forfeit your rights, and that’s not something you want happening when you are busy and still on the property.
A Michigan lady bird deed avoids this problem by giving the owner complete control to sell, mortgage, and gift property without remaining beneficiaries.
Saving the Cost of an Expensive Trust or Estate Plan
Many people seek a revocable living trust as an alternative to probate and the hassle of dealing with courts. A lady bird deed is an option that can accomplish many objectives but for less Cost and complication than the document mentioned above type.
A Lady Bird Deed is one form of testamentary instrument which provides several benefits similar to those offered by a Revocable Living Trust Agreement without requiring additional complexity or expense.
Do Michigan Lady Bird Deeds Affect Property Taxes?
When you transfer the property with a quitclaim deed, to risk increasing your property taxes. With a Lady Bird Deed, you will not have to worry about property taxes. This is because it does not uncap your tax bill like selling the home would do, for example. You are still in the ownership of the land until death, so there can be no transfer without this event taking place first.
Disadvantages of a Lady Bird Deed Michigan?
There are times where lady bird deeds may not be the best estate planning tool to make use of. Sometimes it may make more sense to trust to provide more direction after you pass away on how your property is used.
A Lady Bird Deed may not be appropriate if there is a large estate
The lady bird deed is one of the most common estate planning tools for families, but it may not be appropriate in every situation. For example, there are times when a family has significant property. If there is a substantial property, it may be advisable to have a more complex estate plan in place.
Lady Bird Deed v Revocable Trust: Sometimes trust is better
There can also be a situation or complicated problems with an heir. It may make sense to use a revocable trust instead of a lady bird deed. If the heirs are minors or have credit or substance abuse problems, you may not want your property to vest in these heirs immediately. A revocable trust may be more appropriate for these heirs to protect their long term interests.
Beneficiaries with state benefits and special needs
If a family member is on Medicaid, an inheritance may affect their Medicaid eligibility. Proper Medicaid planning is essential to maintain your beneficiaries’ Medicaid eligibility which can be very important. Having a specialized trust for these heirs may be a better choice for estate planning than a lady bird deed.
The goal of estate planning is to protect your assets and provide for the people who would inherit them. These decisions should be made with the assistance of an experienced attorney that specializes in this area.
Talk to a Lady Bird Deed Attorney to Discuss your estate planning needs
An estate planning attorney can be of assistance in reviewing your estate. Bruce Law Firm has lawyers that can draft a lady bird deed to meet your needs.
A Michigan lady bird deed avoids this problem by giving the owner complete control to sell, mortgage, and gift property without remaining beneficiaries. Saving the Cost of an Expensive Trust or Estate Plan Many people seek a revocable living trust as an alternative to probate and the hassle of dealing with courts. A lady bird deed is one form.
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