Educational guide — not legal advice. Property, probate, and Medicaid law varies by state and changes. Consult a licensed Michigan attorney about your situation.
The short answer
Michigan doesn’t have a statutory transfer-on-death deed like some states. Instead, Michigan is famous for the Lady Bird deed (technically an “enhanced life estate deed”), which Michigan courts and title companies widely recognize. It does much of what a living trust does for your home — for a fraction of the cost.
- A Lady Bird deed is a narrow, cheap tool: it passes one property to a named beneficiary at death while you keep full control during life.
- A living trust is a broad, more expensive tool: it can hold your home and accounts and manage them if you’re incapacitated, all privately.
Because Michigan probate carries an inventory fee scaled to the estate’s value, keeping your home out of probate has real dollar value either way. For many Michigan homeowners, a Lady Bird deed is enough.
What each one is
Lady Bird deed (enhanced life estate deed)
You record a deed that keeps a life estate for yourself — with the enhanced power to sell, mortgage, or revoke without the beneficiary’s consent — and names a remainder beneficiary who receives the property automatically at your death. Key features:
- You keep full control while alive. You can sell it, refinance it, or change the beneficiary. The beneficiary has no rights until you die.
- It avoids probate (and Michigan’s inventory fee) for that property.
- It preserves the Medicaid estate-recovery protection and the property-tax and homestead treatment of your home when done correctly — a big reason it’s popular in Michigan.
- It must be signed, notarized, and recorded with the register of deeds before death.
Living trust
A revocable living trust is a legal container you transfer assets into. You control it while alive (you’re your own trustee), and your successor trustee distributes the assets at death without probate. It can hold real estate, bank and brokerage accounts, and more — and it keeps working if you become incapacitated.
Side-by-side comparison
| Factor | Lady Bird deed | Living trust |
|---|---|---|
| Upfront cost | ~$150–$400 (attorney-drafted) | $1,500–$3,500 |
| What it covers | One piece of real estate | Real estate, accounts, most assets |
| Avoids probate + inventory fee? | Yes, for that property | Yes, for funded assets |
| Helps if you’re incapacitated? | No | Yes |
| Privacy | The deed is a public record | Private |
| Out-of-state property | No (Michigan only) | Yes |
| Controlled / delayed distributions | No — outright transfer | Yes (good for minors, special needs) |
| Preserves Medicaid estate-recovery protection | Yes (when done right) | Depends on trust type |
| Ongoing upkeep | None | Must keep assets titled in the trust |
Why the inventory fee makes this worth doing
Michigan charges a mandatory probate inventory fee (MCL 600.871) on the date-of-death value of probate assets — roughly $363 on a $100,000 estate, ~$863 at $500,000, and ~$1,175 at $1 million. Keeping your home (often your largest asset) out of probate with a Lady Bird deed or trust directly reduces that fee, on top of avoiding the delay and paperwork of probate. See Do You Need a Living Trust in Michigan?.
When a Lady Bird deed is enough
For many Michigan homeowners, the Lady Bird deed is the sweet spot. It’s a good fit if:
- Your main goal is passing your home to one or more people without probate.
- Your other assets already pass outside probate — retirement accounts and life insurance with named beneficiaries, payable-on-death bank accounts.
- Your beneficiaries are adults who can receive the property outright.
- You want to protect the home from Medicaid estate recovery while keeping control during life (a common Michigan reason).
Pair a Lady Bird deed with a will and beneficiary designations, and a typical Michigan estate can pass with little or nothing going through probate.
When a living trust is worth it
Step up to a trust when:
- You want incapacity protection — a trust lets your successor trustee manage assets if you can’t, avoiding a court conservatorship. A Lady Bird deed does nothing here. (A durable power of attorney also helps and is cheaper.)
- You own property in more than one state — a trust avoids a second probate; a Michigan Lady Bird deed only covers Michigan property.
- You want privacy beyond a single deed, or you’re consolidating many assets.
- You need controlled distributions — holding assets for minor children or a special-needs beneficiary. A Lady Bird deed transfers outright, which can be a problem for minors or beneficiaries on benefits.
- You have a blended family or competing interests to balance.
Watch-outs with a Lady Bird deed
- Multiple beneficiaries can get messy. If you name several, they become co-owners who must agree on selling or managing the property.
- It doesn’t handle incapacity. If you become unable to manage your affairs before death, the deed offers nothing.
- Get it drafted right. Michigan Lady Bird deeds aren’t a fill-in-the-blank statutory form — the “enhanced” language matters. A poorly drafted deed can fail or accidentally create a plain (non-enhanced) life estate, which causes gift-tax and Medicaid problems. Use an attorney.
- Record it. A deed signed but never recorded before death is ineffective.
The honest takeaway
In Michigan, a Lady Bird deed is a cheap, effective way to pass your home outside probate and the inventory fee, while keeping control and protecting against Medicaid estate recovery — and for many homeowners it’s all they need. Reach for a living trust when you need more than a single-property transfer: incapacity planning, out-of-state property, privacy across many assets, or controlled distributions. Get either one drafted by an attorney; the Lady Bird deed in particular is easy to get wrong.
Common questions
Is a Lady Bird deed legal in Michigan?
Yes. Michigan doesn’t have a statutory transfer-on-death deed, but Michigan courts and title insurers widely recognize Lady Bird (enhanced life estate) deeds, and they’re routinely used to pass real estate outside probate.
Does a Lady Bird deed avoid Medicaid estate recovery in Michigan?
Generally yes, when properly drafted — the property passes outside probate, and Michigan’s estate recovery currently reaches probate assets. This is a major reason Lady Bird deeds are popular in Michigan, but Medicaid rules are complex, so get advice for your situation.
Is a Lady Bird deed cheaper than a living trust in Michigan?
Much cheaper — a few hundred dollars versus $1,500–$3,500 for a trust. For passing a single home, it often does the same job. A trust is worth more when you need incapacity planning, multi-state coverage, or controlled distributions.
Does a Lady Bird deed avoid the Michigan inventory fee?
Yes, for that property — because the home passes outside probate, its value isn’t counted in the probate inventory fee under MCL 600.871.
Related reading
- Do You Need a Living Trust in Michigan?
- How Much Does an Estate Plan Cost in Michigan?
- Estate Planning in Michigan: The Complete Guide
- How to Avoid Probate in Michigan
- Will vs. Trust: Which Do You Need?
Educational information only — not legal, tax, or financial advice. Michigan property, probate, and Medicaid law is set by statute and changes; confirm your situation with a licensed Michigan attorney. Sources: MCL 600.871 (inventory fee); Michigan Estates and Protected Individuals Code (EPIC), MCL 700; Michigan Medicaid estate-recovery rules.