Most Michigan Lady Bird deeds name the owner's children as the people who get the house at death. But you can also name your revocable living trust. The house still skips probate, and your trust's instructions decide what happens next: who gets it, when, and whether it's sold. Here's how that works, when it makes sense, and what to watch out for.
The Short Version
- A Lady Bird deed can name the trustee of your living trust as the remainder beneficiary.
- At your death, the house goes to your trust without probate, and your successor trustee follows your trust's instructions.
- This helps when beneficiaries are minors, have special needs, or don't get along, or when you want one person in charge of selling.
- Your trust must already be signed, and the deed must identify it correctly.
- Property tax and Medicaid rules can work differently with a trust in the middle, so check before you record.
How It Works
A Lady Bird deed keeps a life estate for you plus the power to sell, mortgage, or change the deed. It names who gets the property if you still own it at death. That "remainder beneficiary" can be a person or the trustee of a trust.
The Michigan Bar Journal gives sample language for a married couple that sends the property, on the second death, to their living trust: "upon the death of the last to die of [Grantors], the Property shall automatically be conveyed to the then acting Trustee of the [Grantor's Revocable Living Trust], [dated], as it may be now or hereafter amended."
Three phrases in that sample matter:
- "then acting Trustee" means whoever is serving as trustee at your death, so the deed still works if your successor trustee changes.
- The trust's name and date identify exactly which trust receives the house.
- "as it may be now or hereafter amended" means you can amend your trust later without re-doing the deed.
The same article notes that Lady Bird deeds are "often used in conjunction with wills, trusts, and other estate planning devices."
Why Families Name a Trust
Minor children or grandchildren
A minor can't manage real estate. If a Lady Bird deed names a child under 18, the family may need court involvement to manage or sell the child's share. A trust can hold the house or its sale proceeds for a minor until an age you choose. See what happens when a minor inherits.
A beneficiary with special needs
Inheriting a house outright could affect a disabled beneficiary's means-tested benefits. A trust can include provisions designed to protect eligibility. That planning is specialized; see Michigan special needs trusts and talk to an attorney.
Several children, one decision-maker
When a deed names three children, they usually become co-owners, and selling the house generally takes all three signatures. If the deed names your trust, your successor trustee can sell and divide the proceeds under your instructions. See inheriting a house with siblings.
Backup plans in one place
What if a child dies before you? A deed naming individuals needs its own backup language. A trust can spell out what happens to each share, and you can update it by amending the trust instead of recording a new deed.
Blended families
A trust can provide for a surviving spouse and still make sure your own children eventually receive the house. See blended family estate planning.
When Naming Your Children Directly Is Fine
Naming individuals is simpler and can be the right choice when:
- You have one adult child, or adult children who get along and agree on what to do with the house.
- You don't have a trust and don't need one for other reasons.
- No beneficiary is a minor, has special needs, or has serious creditor or divorce issues.
The goal is a plan your family can actually carry out. A trust adds a layer: your successor trustee will have to deal with the house and handle the trust's paperwork. See the successor trustee checklist.
Property Taxes: What to Know
When you record the deed. The Michigan Bar Journal explains that because the transfer to the remainder beneficiary isn't effective until death, recording a Lady Bird deed "is not a transfer of ownership for the purposes of uncapping." File a Property Transfer Affidavit when you record and claim the life-estate exemption.
At death. This is where naming a trust can change the analysis. The Michigan Treasury Transfer of Ownership Guidelines say that, for residential property, the end of a life estate is generally not a transfer of ownership if the property goes to the owner's (or spouse's) parent, sibling, child, adopted child, or grandchild and isn't used for a commercial purpose (MCL 211.27a(7)(d)). The guidelines also have separate rules for property moving into and out of trusts, including an exception for distributing residential property from a trust to the settlor's listed relatives when it isn't used commercially (MCL 211.27a(6)(d)(ii) and (7)(v)).
In plain English: Michigan has family exceptions for both direct transfers and trust distributions, but with a trust in the middle there are two steps instead of one. Before relying on it, ask your local assessor or a Michigan attorney how your deed and trust will be treated. See Michigan inherited home property taxes and trusts and the homestead exemption.
Medicaid Estate Recovery
One reason Michigan families use Lady Bird deeds is Medicaid estate recovery. According to MDHHS, the estate subject to recovery "includes all property and other assets that pass from a deceased beneficiary to his/her heirs through a probate proceeding," with an exception for people who received an asset disregard under a long-term care partnership policy. The Michigan Bar Journal says property passing by Lady Bird deed is "not vulnerable to recovery under current Medicaid rules."
A house that passes by Lady Bird deed to a revocable trust also skips probate. But if Medicaid is part of your planning, have a Michigan elder law attorney review the deed and the trust together. Rules can change, and the details of your trust matter. See Michigan Medicaid planning.
Mistakes to Avoid
- Naming a trust that doesn't exist yet. Sign your trust first, then the deed.
- Getting the trust's name or date wrong. Copy them exactly from the signed trust.
- Naming "my trust" instead of the trustee. Real estate is normally titled in the trustee's name. Follow the "then acting Trustee of..." form.
- Revoking the trust later and forgetting the deed. If the trust no longer exists at your death, the gift may fail. Record a new deed if you change plans.
- Leaving out the enhanced-life-estate language. Without the reserved power to sell and mortgage, it's a plain life estate deed. See Lady Bird deed mistakes.
- Not recording it. See how to record a Lady Bird deed.
Frequently Asked Questions
If I have a trust, why not just deed the house into the trust?
You can, and that's the traditional approach. See how to fund a living trust. Some families use a Lady Bird deed to the trust instead, often for Medicaid planning reasons or because they prefer to keep the home in their own name while alive. See Lady Bird deed vs. living trust.
Can I change the beneficiary from my kids to my trust later?
Generally yes, by signing and recording a new Lady Bird deed. The Michigan Bar Journal discusses a case holding the reserved powers allowed the grantor to change "the identity of the remainder beneficiary without the remainder beneficiary's approval." See selling, refinancing, or changing a Lady Bird deed.
What does my successor trustee do when I die?
Record a death certificate and any required affidavit with the register of deeds, take control of the house for the trust, and then follow your trust. See what happens after death.
We're married and each have our own trust. Which one should the deed name?
That depends on how you own the house and what each trust says. Get advice before recording. See joint vs. separate trusts.
Start With the Trust
Naming your trust only works if you have one. The CreateMIWill Trust Kit ($197) includes an attorney-drafted Michigan revocable living trust for one grantor, with a certificate of trust and instruction and signing guides. The Complete Bundle ($349) adds a Michigan will, durable power of attorney, and patient advocate designation. CreateMIWill kits do not include a Lady Bird deed form. For the deed itself, use a Michigan attorney or a form you've confirmed includes the enhanced-life-estate language and names your trust correctly.
Michigan Trust Kit or Complete Bundle
Attorney-drafted Michigan revocable living trust with certificate of trust, funding instructions, and signing guide. Instant download.
Sources: Michigan Bar Journal, "Ladybird deeds: Key features and uses"; Michigan Department of Treasury, Transfer of Ownership Guidelines; MDHHS, Estate Recovery.