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 has no statutory transfer-on-death deed. What is used instead is the Lady Bird deed (an “enhanced life estate deed”), which is a creature of Michigan conveyancing practice rather than of a Michigan statute — no section of the Michigan Compiled Laws creates it, and we found no independent published source for how widely it is accepted, so none is cited here.
- 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.
Michigan probate carries an inventory fee scaled to the value of probate assets under MCL 600.871(1), so an asset that passes outside probate is not counted in the figure the fee is computed on. Either instrument has that effect on the property it covers.
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 is signed, notarized, and recorded with the register of deeds before death. Because no Michigan section creates the Lady Bird deed, the requirements that apply are those for a conveyance generally, which we could not read at source.
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 | Quoted by the preparer; no independent published source | Quoted by the preparer; no independent published source |
| 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 |
How the inventory fee is affected
Michigan charges a mandatory probate inventory fee under MCL 600.871(1) on the date-of-death value of probate assets, in estates where probate proceedings are instituted. MCL 600.871(1)(g) sets the fee at $362.50 plus 1/8 of 1% of the amount over $100,000 for an estate of $100,000 to $500,000; (h) adds $62.50 for each additional $100,000 over $500,000; and (i) $31.25 for each additional $100,000 over $1,000,000. On that schedule the fee is $362.50 at $100,000, $862.50 at $500,000 and $1,175 at $1,000,000. MCL 600.871(2) deducts indebtedness secured by estate real property before the fee is computed. 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?.
What a Lady Bird deed covers
A Lady Bird deed operates on the one parcel it describes. It has effect where:
- the objective is passing that property to one or more named beneficiaries outside probate; and
- the 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.
What a trust covers that a recorded deed does not
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.
- Drafting. 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. The instrument is ordinarily attorney-drafted.
- Record it. A deed signed but never recorded before death is ineffective.
What the record shows
A Lady Bird (enhanced life estate) deed transfers a single parcel of real property at death outside probate, leaving the grantor a life estate with full power to sell, mortgage or revoke. Assets passing that way are not counted in Michigan’s probate inventory fee (MCL 600.871). Because the grantor retains the power to convey, the transfer is not a divestment for Medicaid eligibility purposes, and Michigan’s estate recovery programme reaches only the probate estate. A funded revocable trust covers any number and type of assets retitled into it and additionally provides successor-trustee authority on incapacity, non-public administration, staged distributions to beneficiaries, and administration of out-of-state real property without an ancillary proceeding. Those are the documented attributes on which the two instruments differ; the cost figures for each are cited above.
Common questions
Is a Lady Bird deed legal in Michigan?
Yes. Michigan has no statutory transfer-on-death deed. What is used instead is the 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?
We found no independent published source for what either document costs to draft. We found no independent published source for either figure as of September 2026; the ranges that are published come from law firms and online document sellers, so none is cited here. A deed operates on one parcel of real estate; a trust operates on every asset retitled into it and also covers incapacity management, out-of-state property, and 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: How They Differ
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.