What is a Ladybird Deed?

In the state of Michigan, a Ladybird deed, also known as an enhanced life estate deed, is a legal instrument used in estate planning to transfer real property while retaining control and flexibility during the grantor’s lifetime. With a Ladybird deed, the grantor (property owner) maintains full control over the property, including the right to sell, mortgage, or transfer it, and retains a life estate, allowing him or her to reside in or use the property for the remainder of his or her life. Upon the grantor’s death, the property automatically passes to the designated beneficiary or beneficiaries without the need for probate.

One of the primary advantages of using a Ladybird deed is its ability to avoid probate, the legal process of administering a deceased person’s estate. By transferring property outside of probate, the estate can be settled more quickly and with less expense, saving time and money for both the grantor and his or her beneficiaries. Additionally, because the grantor retains control over the property during his or her lifetime, he or she can modify or revoke the deed if their circumstances change.

However, there are potential pitfalls to consider when using a Ladybird deed. If the grantor requires Medicaid benefits for long-term care in the future, the property subject to the Ladybird deed may be considered a countable asset, potentially impacting eligibility for Medicaid benefits. Additionally, if the designated beneficiary predeceases the grantor or is unable to inherit the property for any reason, complications may arise in determining the property’s disposition.

Given the complexities and potential consequences of using a Ladybird deed, it is crucial to seek guidance from experienced legal professionals like those at Helmkamp, Ellis and Abraham. Our skilled estate planning attorneys can provide personalized counsel, draft the necessary legal documents, and help navigate the intricacies of estate planning to ensure your wishes are accurately reflected and your assets are protected for the future. Contact us today to schedule a consultation and start planning for peace of mind!