Ladybird Deeds in Michigan

Benefits, Limits, and Title Considerations

A ladybird Deed is a popular Estate Planning tool in Michigan. This is a deed that transfers property to a beneficiary at your death (technically, the ‘beneficiary’ is called a remainderman, but we will use ‘beneficiary’ for this article).

Property Law Basics

First, understand that Property Law is another language. It takes a significant amount of study to understand it. If you do understand it: pop quiz, what is a “fee simple determinable with the possibility of reverter”? If you don’t understand it, this article is written with you in mind.

Transfer Basics

Second, understand that in the United States, property law is paper-based, and then records-based. These are different things. Property owners sign the papers which transfer property, then submit those papers to an agency that keeps the records. The signing of the paper technically transfers the property. The recording of the paper lets everyone else in the world know that the transfer occurred. The paper is called a “deed”, and the agency is called the “register of deeds”. There is a register of deeds in each county in Michigan.

One would think that they would not charge the public to access these records. One would be sorely mistaken. It does not cost much, perhaps $15-18 per search, but the register of deeds charges for access to public records. These records are vital to the ordered functioning of the business of real estate transactions.

Let’s say you sign a deed transferring your property to Jim. Jim puts it in his desk and forgets about it. Then, you sign a deed transferring the property to Bob. Bob goes quickly to the Register of deeds and records it. Who owns the property? Bob. But if Bob never recorded, Jim owns it because he is first in time to receive it. Under MCL 565.29, “Every conveyance of real estate within the state hereafter made, which shall not be recorded as provided in this chapter, shall be void as against any subsequent purchaser in good faith and for a valuable consideration, of the same real estate or any portion thereof, whose conveyance shall be first duly recorded.”

Not all systems are like this. An ancient Spanish system did not have a central recording of deeds, but rather the evidence of ownership was use. If someone lived on the land and used it, that was evidence enough that they owned it. The American system adopted this, too, by allowing “adverse possession” and “acquiescence”, two conceptions of land ownership that are based in “equitable title”. If you have equitable title through use of the property, you will need to go to Court to get a written order that you can then record with the register of deeds, but you technically own the property even before going to Court.

The Ladybird Deed

Third, understand that ladybird deeds also have roots in ancient property law principles. The key term here is the “life estate”. In 1066, William the Conqueror established that all lands in England were owned by the Crown, and he gave chosen friends - Lords - land in exchange for their allegiance. The Lords in turn offered life estates to their chosen friends - use of the property for their lifetime. This is also how the term “landlord” came to be. The life estate holder could then establish that their “remainder” interest go to another person upon their death, a “remainderman”, thereby allowing widows to manage the property. This feature of use for a lifetime, with a remainder interest, are key features of the ladybird deed.

In a ladybird deed, you give yourself a life estate to your property. You also give someone else a remainder interest. This allows the property to pass to another person upon your death. There is only one more ingredient, which is that you retain the right to sell the property before you die. A ladybird does not lock you into the remainder interest that you establish in the deed. You can record a new deed with a different remainderman, or even a new deed selling the property outright to another person. The technical term for this is an “enhanced life estate”, which is “enhanced” because you retain the ability to sell the property. In Michigan, it is “an enhanced life estate pursuant to land title standard 9.3”. If you want to learn more, those are the magic words to look for.

Ladybird Deed Benefits

The first and most direct benefit of a ladybird deed is the avoidance of probate court for the home. In Michigan, a property that is passed along to another person through a ladybird deed does not need to go through probate court. Probate court can be expensive and time consuming, and it invites a fight with creditors or family members. If you can reduce the size of your probate estate to less than $53,000 (adjusted for inflation for 2026) through a trust, beneficiary designations, and/or ladybird deeds for your real estate, you won’t have to go through full probate.

Another benefit of a ladybird deed is that it reduces the on-paper size of the estate. This makes it more likely that a creditor will have to write off the debts of the decedent (person who died). If there is nothing in the probate estate, and the particular creditor did not have a secured interest in the property (ie, this is not a mortgage), then the creditor will not have a way to recover against an estate. Nobody is responsible for a debt of the decedent except the estate. There are some restrictions on this: you cannot use a ladybird deed with intent to defraud a creditor. For a lengthy discussion of this, see the unpublished opinion in Taulbee v. Taulbee out of Wayne County Circuit Court, No.369545 (note that this holding supports the use of ladybird deeds even against creditors).

The most important creditor of an estate is often the State of Michigan itself. When you use Medicaid to support your end of life care, the State of Michigan can act as a creditor, attempting to recover against your estate for money the State paid for your care. The ladybird deed prevents recovery against the home the same way that it prevents other creditors from taking against the home. Similarly, the ladybird deed does not impact your eligibility for Medicaid. If your home is an exempt asset because it is worth less than $752,000 (inflation adjusted to 2026), you will continue to be eligible for Medicaid with or without a ladybird deed.

Ladybird Deed Limits

Two limits have already been discussed: 1) you cannot use a ladybird deed with the intent to defraud a creditor; and, 2) your ladybird deed will not magically make you eligible for Medicaid. There are more limits.

The most important limit is time. A ladybird deed gives a piece of property to another person at an exact time. If you have minor beneficiaries (also known as children), giving them your home before they are 18 invites a slew of legal issues. A minor cannot sell, mortgage, manage, or enter into contracts regarding the property. Instead, they will need to have a trusted adult that establishes a conservatorship for the minor. A conservatorship is a court process where one person manages the finances of another person. These are sometimes abusive, as alleged by Brittney Spears, but always a time-consuming job. There is a ton of paperwork, hearings at the beginning, and yearly check-ins with the Court. A trust is a good alternative for minor beneficiaries. You cannot give a gift out over time, using a ladybird deed. This is a one-time gift that is given at the moment of death, not before or after.

The next important limit is control. You give your property to another person and that is it. This is a fire-and-forget gift. If you want to keep your cottage in the family for generations, you need a “cottage trust” with LLC, not a ladybird deed. If you give the home to multiple people through a ladybird deed, you can’t also demand that they share expenses and use of the property. Again, you need a cottage trust with LLC to establish shared use and shared expense policies. If you have a ladybird deed that gives the home to a person, but established a trust that is meant to manage the property, the home is not part of the trust. An estate planning attorney can make sure all parts of your estate plan sing together in harmony.

Title Considerations

The final limit is another ancient language issue. Are you giving the home to multiple beneficiaries as tenants in common? Joint tenants? Joint tenants with rights of survivorship? These are important issues to examine. For a full discussion, see Partitioning Property.

The TLDR is that tenants in common can sell their partial interest in the property and ask for a Court to partition the property, even if their co-owners don’t agree, and if one co-owner dies, their partial interest goes to their children. Joint tenants, on the other hand, need the agreement of all other partial owners to sell the property, but can ask the court to partition the property and sever their joint tenancy into a tenancy in common. If one joint tenant dies, their interest goes to the other co-owners. Joint tenants with rights of survivorship need the agreement of all other partial owners to sell the property, and cannot ask the court to partition the property. If one co-owner dies, their interest goes to the other co-owners.

Conclusion

We draft multiple ladybird deeds per week, at an inexpensive flat fee. We also make sure they get recorded properly at the Register of Deeds. Please Contact Us if you’re interested in learning more.