A Lady Bird deed is supposed to make things easy after a death, and it usually does. The house passes to the named beneficiaries automatically, without probate court. But "automatic" doesn't mean "nothing to do." The county records still show the deceased owner, the tax assessor doesn't know anything changed, and a buyer's title company will want proof before you can sell. This guide walks a Michigan beneficiary through the handful of steps to take, most of which you can do yourself for less than $50.
The Short Version
- Check the county Register of Deeds to confirm the Lady Bird deed is the most recent deed on record.
- Record proof of the owner's death (usually a certified death certificate or an affidavit of death) with the Register of Deeds.
- File a Property Transfer Affidavit (Form 2766) with the city or township assessor within 45 days of the death.
- If you'll live there, file your own Principal Residence Exemption. Update insurance and utilities.
- Keep paying the mortgage if there is one; it doesn't go away.
No probate filing is needed for the house itself, as long as the deed was valid and still in effect at death.
Step 1: Confirm There Is No Later Deed
The person who signed a Lady Bird deed keeps full power to sell, mortgage, or re-deed the property during life. The Michigan Bar Journal explains that a later conveyance by the owner can change or eliminate the beneficiary's interest. So before you do anything else, make sure the owner didn't sign a newer deed.
- Contact the Register of Deeds in the county where the property sits. Many counties let you search records online; others will do a lookup by phone or at the counter.
- Ask for the most recent recorded deed for the property.
- If the Lady Bird deed naming you is the latest deed, you're set. If a later deed exists, read it carefully. It may have named different beneficiaries or moved the home into a trust.
Also check for any recorded mortgages, home equity lines, or liens. You'll want to know what's attached to the property.
Step 2: Record Proof of Death
The public record needs to show that the owner's life estate has ended. There are two common ways to do this in Michigan:
Option A: Record a certified death certificate
Many Michigan practitioners simply record a certified copy of the death certificate with the Register of Deeds for the county where the house is located. Order a few certified copies from the funeral home or the county clerk; you'll need them for banks and insurance too.
Option B: Record an affidavit of death
Michigan law allows a recordable affidavit about facts that affect title to real estate. Under MCL 565.451a, an affidavit may state facts about the "death" of parties named in deeds, and about "the happening of any condition or event that may terminate an estate or interest in real property." The owner's death ends the life estate, so an affidavit of death fits that statute. The affidavit identifies the deceased owner, the property's legal description, the recorded Lady Bird deed (by liber and page or document number), and states the date of death. It is signed in front of a notary by someone with personal knowledge, and a death certificate is often attached.
Practical tips
- Call the Register of Deeds first and ask what they prefer and what the recording fee is. Most Michigan counties charge around $30 for a short document.
- Include the parcel number and legal description so the document gets indexed to the right property.
- Keep the recorded copy (with the recording stamp) with your important papers. A title company will ask for it when you sell or refinance.
Step 3: File the Property Transfer Affidavit
The owner's death is a transfer for property tax purposes, so the local assessor needs to hear about it.
- Use Form 2766, Property Transfer Affidavit. It's free.
- File it with the city or township assessor (not the county) within 45 days of the date of death. Late filing can bring a penalty.
- Form 2766 has a box for a transfer between certain family members of the portion of a property after the expiration or termination of a life estate retained by the transferor. If you are the owner's (or owner's spouse's) child, grandchild, parent, brother, or sister, check that box and describe the relationship.
If that exemption applies and the home isn't used commercially afterward, the taxable value usually stays capped. For details, including the rental trap, see our guide on inheriting a Michigan home and property taxes.
Step 4: Handle Taxes, Insurance, and Utilities
- Principal Residence Exemption: The deceased owner's exemption doesn't carry over to you. Michigan Treasury says the estate's personal representative or trustee must file Form 2602 to rescind the deceased owner's exemption within 90 days of death. If you'll live in the home as your main residence, file your own Principal Residence Exemption affidavit (Form 2368) with the assessor.
- Homeowner's insurance: Call the insurer right away. Many policies restrict coverage for a vacant home or for a home whose named insured has died. Get the policy moved to your name.
- Property tax bills: Update the mailing address with the local treasurer so bills come to you. Don't let summer or winter taxes go unpaid.
- Utilities: Transfer accounts to your name. In winter, keep heat on in a vacant house to avoid frozen pipes.
What About the Mortgage?
A Lady Bird deed moves ownership, not debt forgiveness. If the owner had a mortgage or home equity loan on the property, it stays attached to the house. The beneficiary doesn't become personally liable for the loan just by inheriting, but the lender can foreclose if payments stop.
- Contact the loan servicer, tell them the borrower died, and send a death certificate.
- Ask about your options: keep making payments, refinance into your own name, or sell and pay off the loan.
- Keep paying in the meantime to avoid late fees and default.
Medicaid Estate Recovery
If the owner received Medicaid long-term care, you may get a letter from the Michigan Department of Health and Human Services. Michigan's Estate Recovery program seeks repayment from the estates of certain Medicaid recipients age 55 and older who received long-term care services.
The key definition: according to MDHHS, "An estate includes all property and other assets that pass from a deceased beneficiary to his/her heirs through a probate proceeding." A home that passes by Lady Bird deed doesn't go through probate. The Michigan Bar Journal notes that property transferred by Lady Bird deed "is not included within the grantor's estate and, as a result, not vulnerable to recovery under current Medicaid rules."
Two cautions: MDHHS notes an exception for people who received an asset disregard through a long-term care partnership insurance policy, where recovery can reach non-probate assets. And if you get an MDHHS notice with a questionnaire, respond by its deadline (the agency asks for it within 2 weeks) rather than ignoring it.
Selling the House and Capital Gains
You can generally sell once the death is recorded and title is clear. A title company will review the Lady Bird deed, the recorded proof of death, and any mortgages.
Good news on taxes: the Michigan Bar Journal explains that a Lady Bird deed beneficiary "will receive a step up in basis," meaning the home's tax basis resets to its fair market value on the date of death. If you sell soon for about that value, there's little or no capital gain. Get a date-of-death appraisal or a realtor's market analysis and keep it with your tax records. Michigan has no inheritance tax.
If There Are Several Beneficiaries
When a Lady Bird deed names two or more people, they usually take the house together, often as tenants in common. That means:
- All owners generally need to sign to sell the whole property or to take out a new mortgage.
- Decide early who pays taxes, insurance, and upkeep, and put it in writing.
- If one sibling wants to keep the house, they can buy out the others. A buyout between co-owners is a sale, so talk to the assessor about how it affects the taxable value.
If a named beneficiary died before the owner, read the deed language. Many deeds say that share passes to the beneficiary's children ("per stirpes") or to the other beneficiaries. If the deed is silent, a title company may require more steps, and this is a good time for a short consult with a Michigan attorney.
Frequently Asked Questions
Do I need to open probate for the house?
Not for a house that passes by a valid, unrevoked Lady Bird deed. Other assets in the owner's name alone (such as a bank account without a payable-on-death beneficiary) may still need probate or the small estate affidavit.
Is there a deadline to record the death certificate?
There's no strict deadline, but do it promptly. The Property Transfer Affidavit is due within 45 days of the death, and a buyer or lender will need the record cleaned up before closing.
Can the owner's creditors take the house?
Creditor rules for non-probate assets can be complicated. If the owner left significant unpaid debts, get advice before selling or distributing sale proceeds.
What if I can't find the original Lady Bird deed?
The recorded copy at the Register of Deeds is what counts. Order a certified copy from the county.
Make It This Easy for Your Own Family
If handling a Lady Bird deed after a parent's death made you think about your own home, you can set up the same thing yourself. The CreateMIWill Trust Kit ($197) and Complete Bundle ($349) include an attorney-drafted Michigan Lady Bird deed template with signing and recording instructions. The $89 Will Kit covers your will, powers of attorney, and healthcare documents but does not include the Lady Bird deed template.
Keep Your Home Out of Probate
Attorney-drafted Michigan Lady Bird deed template and revocable living trust, with plain-English signing and recording instructions. Instant download.
Sources: Michigan Bar Journal, "Ladybird deeds: Key features and uses"; MCL 565.451a; MDHHS Estate Recovery; Michigan Form 2766.