Michigan Lady Bird Deed vs. Revocable Living Trust: Which One Should You Use?

If you have read our Michigan Lady Bird deed and revocable living trust guides, you have already met the two most popular tools for keeping a Michigan family out of probate court. The question that brings most readers to this site is the next logical one: which should I actually use? They are not the same tool. The Lady Bird deed is a $30 recording fee that solves one problem (the family home). The revocable living trust is a $199-$2,500 document that solves five or six problems at once. Pick wrong and you either overpay for tools you do not need or leave the bulk of your estate exposed to probate. This guide walks through the comparison the way a Michigan attorney would explain it at the kitchen table, with a decision framework you can use today.

The 30-Second Answer

Use a Lady Bird deed if your home is your only big asset, you have a clear single beneficiary you want it to pass to, you are not concerned about a disability period, and you do not have minor children. Total cost: roughly $30 in recording fees plus the cost of a template.

Use a revocable living trust if you have real estate AND meaningful bank/brokerage/retirement assets, blended-family considerations, minor children, a beneficiary who shouldn't receive money outright, or you want one document to handle your incapacity AND your death. Total cost: $199-$2,500 depending on whether you hire an attorney.

Use BOTH in the most common Michigan scenario: a trust as the central plan, with a Lady Bird deed as an inexpensive backstop for the home in case the home was never re-titled into the trust. This belt-and-suspenders combo is standard estate planning practice in Michigan, and the CreateMIWill Complete Bundle includes both.

What Each Tool Actually Does

The Lady Bird Deed

A Lady Bird deed (called an "enhanced life estate deed" in some other states) is a Michigan real estate transfer tool that lets you keep complete control of your house while you are alive AND name a beneficiary who automatically receives the home at your death, without probate. Per the standard Michigan summary at Rochester Law Center, the deed creates an enhanced life estate that lets you sell, refinance, mortgage, or revoke at any time. Your beneficiary has no rights until you die. On death, the home transfers automatically to whoever you named in the deed. It is one piece of paper, recorded once with the county Register of Deeds.

The Revocable Living Trust

A Michigan revocable living trust is a legal entity you create during your life to hold your assets. You typically serve as the initial trustee, so you continue to control everything just as before. When you become incapacitated, your named successor trustee takes over without a court guardianship. When you die, the successor trustee distributes assets according to your instructions, again without court involvement. The trust can be amended or revoked any time. Per the breakdown at SwiftProbate, a Michigan revocable living trust avoids probate for every asset that has been re-titled into the trust's name -- which is the part most families forget to do.

The trust is more powerful but requires "funding" -- the process of moving your accounts, deeds, and other assets out of your individual name and into the trust's name. A trust without funding is just an empty document.

Real Cost Comparison

This is where most readers tip one way or the other. The honest Michigan numbers:

• DIY Lady Bird deed: free template + $30 county recording fee + maybe $5 in copy fees + your time = $35-$50 total.
• Attorney-drafted Lady Bird deed: $300-$700 depending on the attorney and complexity.
• DIY revocable living trust (CreateMIWill Trust Kit): $199 one-time, including the trust document, certification of trust, pour-over will, schedule of trust assets, and funding instructions.
• Attorney-drafted revocable living trust: $1,500-$3,500 for a basic Michigan family trust; $3,500-$10,000 for blended-family or larger estates.

The DIY-versus-attorney delta is large. The CreateMIWill kits exist precisely because most Michigan families with straightforward situations do not need a $3,000 attorney-drafted trust -- they need a $199 attorney-drafted template they can finish themselves. The legal underpinnings are the same.

Coverage: What Each One Protects

The single biggest difference between a Lady Bird deed and a revocable living trust is scope. The Lady Bird deed covers exactly one thing: the specific parcel of real estate described in the deed. The trust can cover everything you own.

Here is what a Lady Bird deed does NOT touch:

• Bank accounts (use POD/TOD designations - see our POD/TOD guide)
• Brokerage/investment accounts (use TOD)
• Retirement accounts (use beneficiary designations)
• Life insurance (use beneficiary designations)
• Vehicles (use Michigan TOD title under Public Act 87 of 2024)
• Personal property -- furniture, jewelry, art, tools (still goes through probate via your will)
• Second homes, vacation property, cottages (would need a separate Lady Bird deed for each)
• Business interests, LLC membership interests, partnership shares
• Anticipated inheritances or future assets you do not yet own

A revocable living trust can hold all of these. Once an asset is properly titled in the name of the trust, it passes outside probate at your death and is also available to your successor trustee during any incapacity.

For a family with a $200,000 paid-off home and a $30,000 bank account, a Lady Bird deed plus a POD designation on the bank account covers 100% of the estate for under $50. For a family with a home, two retirement accounts, a brokerage account, a cottage, and a stake in a family LLC, a trust is the only sane way to avoid probate on all of it.

The Medicaid Question

The Medicaid angle is the part that gets misreported the most. The clearest analysis comes from Michigan attorneys who handle nursing-home planning, like the breakdown at Castle Wealth Group. The accurate version, for Michigan in 2026:

Lady Bird deed AND Medicaid:

• Recording a Lady Bird deed is NOT a divestment for Medicaid eligibility purposes. Because you keep complete control of the property, Michigan Medicaid (DHHS) does not treat it as a transfer. The five-year lookback rule does not start running. This is a big advantage over an outright gift.
• Lady Bird deeds DO avoid Michigan Medicaid estate recovery. When the Medicaid recipient dies, the home transfers automatically to the named beneficiary outside the probate estate. Michigan's Medicaid estate recovery program (MERP) can only recover from probate assets. Since the Lady Bird-deeded home never enters probate, Medicaid cannot place a claim against it after death.
• The home counts as an exempt resource for Medicaid eligibility as long as the home's equity value is below the Michigan equity cap ($730,000 for 2025; the cap adjusts annually).

Revocable living trust AND Medicaid:

• A revocable living trust does NOT protect assets from Medicaid spend-down. Because you can revoke the trust, Medicaid treats trust assets as still yours.
• A revocable trust does NOT avoid Medicaid estate recovery in Michigan. Some states (including Michigan as of 2017) have expanded estate recovery to include certain non-probate assets. The current Michigan policy is to recover only from probate assets, but a revocable trust's exposure can shift as rules update.
• To get real Medicaid asset protection in Michigan, you need an irrevocable trust (often called a "Castle Trust" or Medicaid Asset Protection Trust) funded at least 5 years before applying for nursing-home Medicaid. That is a different document, not part of basic estate planning kits.

For most Michigan homeowners worried about nursing-home costs eating the home, the Lady Bird deed is the right starting point. For full Medicaid asset protection on bank and investment accounts, an irrevocable trust is required.

Side-by-Side Comparison Table

How to Choose: A Decision Framework

Walk through these five questions. The answers point you to the right tool.

1. Is the home essentially your only major asset? If yes, lean Lady Bird deed. If no, lean trust.
2. Do you have meaningful non-real-estate assets to pass outside probate? Bank accounts over $30,000, brokerage, multiple retirement accounts -- if yes, lean trust. Bank account under $30,000 can be handled with a POD beneficiary.
3. Do you have minor children, a disabled beneficiary, or a beneficiary you do not want receiving money outright? If yes, you need a trust. The Lady Bird deed cannot stage distributions, manage inheritances, or hold assets for minors.
4. Are you in a second marriage with kids from a prior relationship? If yes, a trust is almost certainly right. See our blended family guide. A Lady Bird deed naming one spouse cuts the other family out entirely.
5. Are you concerned about future incapacity or who will manage things if you become unable? If yes, a trust provides this. The Lady Bird deed does nothing for incapacity -- you still need a durable financial power of attorney for that scenario.

A useful rule of thumb: if your total estate (home + accounts + everything else) is below $250,000 and you have a single named beneficiary, a Lady Bird deed plus a will plus POD designations is enough. If your estate is above $250,000 OR you have any of the complications in questions 3-5, the trust is the right tool.

When to Use BOTH

In practice, most Michigan attorneys recommend using both. The Lady Bird deed serves as a "backstop" for the home in case the home was never properly re-titled into the trust. Here is why:

One of the most common Michigan estate planning failures is unfunded trusts. A family creates a beautiful trust, the attorney drafts a deed re-titling the home into the trust, and then... the family forgets to record that deed. The home stays in the individual owner's name. When the owner dies, the trust does not own the home, and the home goes through probate anyway.

A Lady Bird deed recorded as a backup means: if the home is not in the trust at death, it still passes outside probate to the named beneficiary (typically the trust itself or the same person who would have inherited via the trust). The Lady Bird deed costs $30 and takes one hour. It is cheap insurance against funding failure.

The CreateMIWill Complete Bundle ($349) includes both the Will Kit (which contains a Lady Bird deed template) and the Trust Kit (which contains the revocable living trust), so a Michigan family can build the belt-and-suspenders plan in one purchase.

Frequently Asked Questions

If I have a trust, do I still need a Lady Bird deed?

Not strictly necessary if the home is properly re-titled into the trust. But adding a Lady Bird deed as a backstop is recommended in case the trust funding step is missed or reversed (for example, if the home is refinanced and the lender takes it out of the trust temporarily, as some lenders do).

If I have a Lady Bird deed, do I still need a will?

Yes. The Lady Bird deed only covers the named real estate. Everything else you own -- furniture, vehicles, accounts not subject to POD, jewelry, tools -- still needs a will to direct distribution. Michigan also requires a will to name a guardian for minor children. Our trust guide explains the pour-over will that pairs with a trust.

Can I name a trust as the beneficiary on a Lady Bird deed?

Yes. Many Michigan estate plans name the revocable living trust as the Lady Bird deed beneficiary. When the owner dies, the home transfers to the trust, and the trust then distributes to the named individuals per the trust terms. This is the standard belt-and-suspenders setup.

Does a Lady Bird deed cost more in property taxes?

No. Michigan treats a Lady Bird deed transfer as a non-uncapping event at death because it is an automatic transfer that occurs by operation of the deed. The transferee inherits the home with the same uncapped status the deceased owner had, subject to the usual exemptions for inheritance from immediate family. A revocable trust transfer is also typically a non-uncapping event in Michigan. Both are tax-neutral compared to keeping the home in your own name.

Which is harder to mess up?

The Lady Bird deed. One document, recorded once, names one beneficiary. The revocable living trust has more moving parts: drafting the trust, signing it correctly with witnesses, retitling each individual asset, keeping the schedule of assets updated, and remembering to put new assets into the trust as you acquire them. Trusts fail most often not because the document is wrong but because the assets never get funded into them.

Can I draft both myself in Michigan?

Yes. There is no Michigan statute requiring an attorney for either. The Lady Bird deed is a one-page document that gets recorded at the county Register of Deeds. The revocable living trust is a longer document but the legal requirements are straightforward -- in writing, signed by the grantor (and ideally witnessed or notarized). The CreateMIWill Will Kit ($89) includes a Michigan Lady Bird deed template, and the Trust Kit ($199) includes a Michigan revocable living trust.

Which one protects the home if I go into a nursing home?

Neither prevents Medicaid from counting the home as yours during your lifetime -- the home is generally exempt as long as your equity is below the cap. The Lady Bird deed protects the home from Medicaid estate recovery AFTER your death. The revocable trust does not. For asset protection during your lifetime, you need an irrevocable Medicaid trust funded at least five years before applying for Medicaid.

If I change my mind, which is easier to undo?

The Lady Bird deed -- record a new deed naming a different beneficiary, or a deed revoking the prior one. Cost: another $30 recording fee. The revocable trust requires a written amendment signed and ideally notarized, which is also easy but requires the trust's amendment procedure to be followed correctly.

Does the deed beneficiary need to know about the Lady Bird deed?

No. Many Michigan homeowners record Lady Bird deeds without telling the named beneficiary. It can be a surprise after death. Same for trusts -- you do not have to tell beneficiaries the trust exists.

What about Michigan's Transfer-on-Death deed?

Michigan has not adopted the Uniform Real Property Transfer on Death Act. There is no statutory TOD deed for real estate in Michigan. The Lady Bird deed (enhanced life estate deed) is Michigan's equivalent. Other Michigan TOD-style designations (vehicles, securities, bank accounts) are governed by different statutes and discussed in our POD/TOD beneficiary guide.

Get the Right Michigan Estate Planning Kit

If your situation calls for just a Lady Bird deed plus a basic will, the Will Kit ($89) covers it -- includes the Michigan will, durable financial POA, patient advocate designation, HIPAA release, and a Lady Bird deed template. If you need the full belt-and-suspenders plan, the Complete Bundle ($349) adds the revocable living trust and pour-over will.