Lady Bird Deeds

Ever wonder what kind of alternatives there are for wills and trusts? What if the main/only asset you own is your home? Can your estate beneficiaries still avoid probate court without needing a trust? Yes. There are a few ways you can do this. One of them is by owning assets with another person in joint tenancy, which has its risks and is rarely the best alternative especially in situations not involving a married couple. The better alternative is called a lady bird deed.

Lady bird deeds are only legal in a few states nationwide, including Michigan. They are often powerful tools when it comes to Medicaid and other estate planning. Lady bird deeds are effective if your main valuable asset is a home and you want your family to avoid probate court upon your passing. There are also tax advantages (they give your beneficiaries a step-up in basis at the time you pass away). This special deed allows you to keep control over your home throughout your lifetime but once you pass away it automatically gets transferred to your beneficiary, unlike when you pass away without having lady bird deed language in your typical warranty or quitclaim deed, which would typically have your family go through probate court to transfer it out of your name after your passing. Lady bird deeds are not flexible though, and may not offer benefits that a trust and will do but they are useful in certain situations. They are cost-effective alternatives to trusts but are used in specific situations where you do not have minor children, do not want to pay for a trust, and your home is your main asset.