In the vast realm of estate planning, the Michigan Ladybird Deed stands out as a unique and powerful tool. Also called an "enhanced life estate deed," this lesser-known document offers Michigan residents a flexible way to manage real estate after death.
Named after First Lady Ladybird Johnson, a Ladybird Deed is a type of deed used to transfer property without the requirement of going through the probate process. The probate court process can be time-consuming, expensive, and emotionally taxing for the family left behind after a death. The Ladybird Deed provides an elegant solution to avoid probate while retaining control over your property during your lifetime.
One of the most significant advantages of a Ladybird Deed is its flexibility. Unlike other deed transfers, it allows you to retain full control over your property while you are alive. For example, a life estate grants an interest in the property to both the owner and the beneficiary, or remainderman. The owner of the property is unable to sell the property without the remainderman’s approval, and the owner would only get a portion of the proceeds of such a sale. In contrast, with a Ladybird Deed, you can sell, mortgage, lease, or even give away the property without needing to seek permission from the beneficiaries named in the deed.
Additionally, the Ladybird Deed provides an advantage when it comes to Medicaid planning. Medicaid, the state and federally funded program that provides healthcare coverage to eligible low-income individuals, has strict asset limits. Utilizing a Ladybird Deed allows you to potentially qualify for Medicaid assistance while preserving your home for your heirs after death.
The Ladybird Deed also allows you to change your mind about the property's beneficiaries at any time. You can simply create a new Ladybird Deed, modifying the beneficiaries or their shares of the property, giving you flexibility in your estate planning strategy.
Just like with any legal instrument, a Ladybird Deed requires careful consideration and proper execution. It is important to consult with an experienced estate planning attorney to ensure that the deed is drafted correctly and in compliance with Michigan law. Contact our office today to discuss whether this is the right tool for you and your family.