A Lady Bird Deed is a special type of property deed that allows Michigan homeowners to transfer real estate to beneficiaries upon death without going through probate court. Unlike a traditional deed transfer, you retain complete ownership and control of the property during your lifetime—including the right to sell, mortgage, or even change your mind entirely.
For Michigan residents concerned about protecting their home while preserving flexibility, this estate planning tool offers a powerful combination of simplicity and protection. However, a Lady Bird Deed isn’t the right choice for everyone. Understanding how these deeds work under Michigan law, their limitations, and when alternative strategies might serve you better can save significant time, money, and family conflict down the road.
At Boroja, Bernier & Associates, our estate planning attorneys regularly help Michigan homeowners evaluate whether a Lady Bird Deed fits their specific situation—or whether a different approach would better protect their family and assets.
How Lady Bird Deeds Work Under Michigan Law
Michigan is one of only a handful of states that recognize Lady Bird Deeds, making this tool particularly valuable for residents planning their estates. The deed creates what’s legally known as an “enhanced life estate,” governed by property transfer laws under MCL 565.48 and related Michigan real property statutes.
Here’s what happens when you execute a Lady Bird Deed:
During your lifetime, you retain what’s called an “enhanced life estate.” This means you keep full ownership rights—you can live in the home, rent it out, sell it, refinance it, or revoke the deed entirely without needing permission from your named beneficiaries. The beneficiaries have no current ownership interest and cannot force a sale or interfere with your decisions.
Upon your death, the property automatically transfers to your named beneficiaries through what’s called a “remainder interest.” Because the transfer happens by operation of law through the deed itself, the property bypasses probate court entirely. Your beneficiaries receive ownership without waiting months for court proceedings or paying probate fees.
Many Michigan residents don’t realize that unlike a traditional life estate deed, a Lady Bird Deed preserves your right to change your mind. With a standard life estate, you’d need your beneficiaries’ consent to sell or refinance. The “enhanced” nature of a Lady Bird Deed eliminates this restriction.
Why It’s Called a Lady Bird Deed
The unusual name traces back to a Florida attorney and law professor who reportedly used former First Lady Lady Bird Johnson’s name in a teaching example to illustrate this type of deed. Despite having no actual connection to Lady Bird Johnson, the memorable nickname stuck and spread to other states—including Michigan—where the legal mechanism is recognized.
In legal documents and court filings, you’ll see these deeds referred to as “enhanced life estate deeds” or “transfer on death deeds with retained life estate.” However, most Michigan real estate attorneys and title companies understand the term “Lady Bird Deed” and use it interchangeably.
Key Benefits for Michigan Homeowners
Probate Avoidance
The primary advantage of a Lady Bird Deed is avoiding Michigan’s probate process. Under MCL 700.3101 et. seq., probate administration can take six months to over a year for most estates, with court fees, attorney costs, and executor compensation reducing what your heirs ultimately receive. A Lady Bird Deed transfers property immediately upon death, outside probate jurisdiction.
Medicaid Planning Protection
For seniors planning for potential long-term care needs, Lady Bird Deeds offer significant Medicaid advantages. Because you retain the right to sell or revoke the deed, the transfer isn’t considered a completed gift under Michigan Medicaid rules. This means:
- The property’s value isn’t counted as a disqualifying asset transfer
- No five-year lookback penalty applies when you execute the deed
- The home may be protected from Medicaid Estate Recovery Program (MERP) claims after your death
Under MCL 400.112g, Michigan’s Medicaid Estate Recovery Program can seek reimbursement from a deceased recipient’s estate for benefits paid during their lifetime. However, property transferred via Lady Bird Deed passes outside the probate estate, potentially shielding it from MERP claims.
Retained Control and Flexibility
Unlike irrevocable trusts or outright transfers, a Lady Bird Deed costs you nothing in terms of control. You can:
- Sell the property without beneficiary consent
- Refinance or take out a home equity loan
- Change beneficiaries by recording a new deed
- Revoke the deed entirely and regain full traditional ownership
- Continue claiming homestead exemptions and property tax benefits
Lower Cost Than Trust-Based Planning
Creating a Lady Bird Deed typically costs between $500 and $800 when prepared by a Michigan estate planning attorney, plus recording fees that vary by county (typically $30 to $60 in Macomb and Oakland Counties). By comparison, a revocable living trust with proper funding often costs $2,500 to $5,000 or more. Although Lady Bird Deeds offer a lower cost alternative there are many tradeoffs with control and protection compared to a revocable living trust.
Limitations and Potential Drawbacks
Only Covers Real Estate
A Lady Bird Deed only transfers real property. Bank accounts, investment accounts, vehicles, and personal property require separate planning strategies. If your estate includes significant non-real estate assets, you’ll need additional tools like transfer-on-death designations, beneficiary accounts, or a comprehensive trust based estate plan.
Beneficiary Predeceasing You
If your named beneficiary dies before you do, and the deed is not updated, the property could end up passing through your probate estate—exactly what you were trying to avoid. This is one of the potential limitations on not comprehensively preparing your estate plan, but Lady Bird Deeds are still very effective if nothing goes wrong.
Title Insurance and Refinancing Complications
Some lenders and title insurance companies are less familiar with Lady Bird Deeds, potentially causing delays when refinancing or selling. We’ve been seeing lenders requesting an additional deed to be prepared to refinance a property solely which then requires you to prepare a Lady Bird Deed again to utilize its benefits.
Not Suitable for Complex Family Situations
Blended families, situations involving minor children, or estates with multiple properties or business interests often require more sophisticated planning. A Lady Bird Deed addresses one property and one set of beneficiaries—it can’t handle conditional distributions, staggered inheritances, or protection from a beneficiary’s creditors or divorce.
When a Lady Bird Deed Makes Sense
A Lady Bird Deed may be ideal if you:
- Own your primary residence and want it to pass directly to one adult beneficiary (additional beneficiaries increase complexity and risky, unintended consequences)
- Want to avoid probate costs and delays for your real property
- Are planning for potential Medicaid eligibility and want to protect your home
- Prefer a lower-cost alternative to a trust for real estate specifically
- Want to maintain complete control during your lifetime with no restrictions
In our experience serving families throughout Michigan, Lady Bird Deeds work particularly well for seniors whose primary asset is their home and whose estate planning goals are straightforward and very simple. For more complex situations, we often recommend combining a Lady Bird Deed with other planning tools—such as a revocable living trust that provides broader protection.
The Recording and Execution Process
For a Lady Bird Deed to be valid in Michigan, it must be:
- Properly drafted with correct legal language establishing your enhanced life estate and the remainder beneficiaries’ interests
- Signed by you as the property owner (grantor) in the presence of a notary public
- Recorded with the Register of Deeds in the county where the property is located
Recording typically takes one to two weeks, and you’ll receive a recorded copy with the county’s stamp. The deed becomes part of the public record, meaning your beneficiaries’ names will be visible to anyone who searches the property title.
Frequently Asked Questions About Lady Bird Deeds in Michigan
How much does a Lady Bird Deed cost in Michigan?
Attorney fees for preparing a Lady Bird Deed typically range from $500 to $800, depending on complexity and the attorney’s experience. County recording fees add another $30 to $60. This makes Lady Bird Deeds alone affordable but there are many tradeoffs and gaps in coverage when not combined with a comprehensive estate plan – like a revocable trust.
Can I change my mind after signing a Lady Bird Deed?
Yes, you retain full authority to revoke or modify a Lady Bird Deed at any time during your lifetime. You can record a new deed with different beneficiaries, sell the property outright, or revoke the Lady Bird Deed entirely. This flexibility distinguishes enhanced life estate deeds from irrevocable transfers.
Will a Lady Bird Deed affect my property taxes or homestead exemption?
No. Because you retain full ownership rights during your lifetime, your homestead exemption and property tax status remain unchanged. The property continues to be assessed as your primary residence as long as you live there. The transfer to beneficiaries upon your death may trigger uncapping of the taxable value under Michigan’s laws, but that occurs with any ownership transfer.
Does a Lady Bird Deed protect my home from nursing home costs?
A Lady Bird Deed can help protect your home from Medicaid Estate Recovery after your death, since the property passes outside your probate estate. However, it doesn’t protect the home from being counted during Medicaid eligibility determinations while you’re alive—though primary residences have separate protections under Medicaid rules a portion of the home may be countable depending on who and how it’s owned. Consult with an elder law attorney about comprehensive Medicaid planning strategies.
What happens if my beneficiary has debts or gets divorced?
Until your death, beneficiaries have only a “remainder interest” with no current ownership rights. However, after the property transfers upon your death, it becomes your beneficiary’s asset and could be subject to their creditors or divorce proceedings. If protecting the property from beneficiaries’ future financial problems is a priority, a trust can provide better protection.
Can I use a Lady Bird Deed for rental property or vacation homes?
Yes, Lady Bird Deeds can be used for any Michigan real estate you own, including rental properties, vacation homes, and vacant land. However, the Medicaid planning benefits apply primarily to your primary residence. Investment properties have different Medicaid treatment and may require alternative planning strategies.
Take the Next Step: Evaluate Your Options
A Lady Bird Deed can be an excellent estate planning tool for Michigan homeowners seeking simplicity and probate avoidance—but it’s just one option among many. The right choice depends on your complete financial picture, family dynamics, and long-term goals.
At Boroja, Bernier & Associates, our estate planning attorneys help Michigan families throughout the state evaluate their options and implement strategies tailored to their specific needs. Whether a Lady Bird Deed fits your situation or a more comprehensive approach would better serve your family, we provide clear guidance without unnecessary complexity.
To schedule a consultation with the Michigan estate planning attorneys at Boroja, Bernier & Associates, call our law offices at (586) 991-7611. With our main office in Shelby Township and satellite offices in Troy, Ann Arbor, and Lansing, we’re conveniently located to serve families statewide.
