LADY BIRD DEED HAS BENEFITS AND LIMITATIONS
During the past 20 years, Lady Bird deeds have often been used in estate planning. A Lady Bird deed creates a general lifetime power of appointment and names a default beneficiary to receive property upon the death of the owner. This type of deed got its nickname when President Lyndon B. Johnson used it to convey property to his wife, Lady Bird Johnson. It is valid under Michigan Land Title Standard 9.3 (pdf).
The benefits of a Lady Bird deed
Using a Lady Bird deed allows an owner to retain control of property during his or her lifetime and pass ownership to persons of his choice upon his death, outside of probate. It can be used as a simple, inexpensive estate plan for persons whose residence is the major or only asset that may need to be probated upon death. After the owner’s death, the default beneficiary only has to record the death certificate and file a Property Transfer Affidavit with the local assessor. (If a default beneficiary plans to use the property as his or her own residence, he or she should also apply for a Principal Residence Exemption for property taxes.)
How a Lady Bird deed works
Typically, property owners name themselves as both grantor and grantee in the Lady Bird deed, and as both donor and donee (a person who is given a power of appointment) of the power of appointment. This way, married couples retain protection from creditors while both spouses are living. A default beneficiary receives no incidents of ownership until the death of the donee, so the property is also protected during the owner’s lifetime from claims by creditors of the beneficiary. Execution of a Lady Bird deed is not considered a gift subject to federal gift tax, or a divestment subject to penalty for Medicaid eligibility purposes. After signing a Lady Bird deed, an owner may still sell, gift, mortgage or lease the property during his or her lifetime. The default beneficiary receives the property only if the owner still owns it at time of death. The property receives a step-up in basis at the owner’s death, beneficial for income tax purposes (avoiding capital gain). Further, if the default beneficiary is a close relative, as defined in MCL 211.27a(7)(d), property taxes will not be uncapped upon the owner’s death.
What if nursing home care is needed?
During a grantor’s stay in a nursing home on Medicaid, a Lady Bird deed is helpful to preserve his or her residence as an exempt asset under Medicaid eligibility rules, and as an inheritable asset that (under present law) avoids a Medicaid estate recovery lien. But the nursing home resident’s income must be used to pay his or her care costs, so it will not be available to defray upkeep and maintenance expenses for the residence. Default beneficiaries will have to find another way to cover these expenses during the nursing home stay.
Limitations of a Lady Bird deed
Use of a Lady Bird deed is not a preferred method in some situations, such as when an owner is likely to die leaving a sizable unpaid lien on the property. It may be inadvisable where an owner wishes to leave the property to multiple (more than 2 or 3) default beneficiaries, particularly if they do not get along. The reason is that the default beneficiaries will have to work together to sell or dispose of the property following the owner’s death, and disagreements could lead to a partition lawsuit.
A Lady Bird deed sets up a less flexible arrangement than a trust. If the Lady Bird deed names more than one default beneficiary, it does not allow just one of them to sell the property following the owner’s death unless the others give their power of attorney. Furthermore, a Lady Bird deed typically makes no provision for descendants of a default beneficiary who predeceases the donee/grantee. However, a grantor may solve these problems by naming the successor trustee of the grantor’s living trust as the default beneficiary in the Lady Bird deed. If the default beneficiary named in the Lady Bird deed is not a close relative, as defined in MCL 211.27a(7)(d), property taxes will be uncapped upon the death of the donee of the power of appointment. This may not be beneficial for property that has appreciated significantly over time.
Mr. Weiss,
Nice article regarding lady bird deeds.
I have two questions.
Since you wrote this article on June 17, 2016 and it is now March 26, 2018, I’m wondering if anything has changed in Michigan law that would cause property to NOT receive a step-up in basis at the owner’s death. i.e. Is the step-up still applicable?
You state in the article “Use of a Lady Bird deed is not a preferred method in some situations, such as when an owner is likely to die leaving a sizable unpaid lien on the property.”
My question is why is this so? Why is a lady bird need not preferred when there is a sizable unpaid lien on the property?
Thank you in advance for your response.
Thank you for the response. We will respond to your specific inquiries by email to you.
How can I contact you?
Nice article. My mom had a ladybird deed written up. It was separate from the trust and not included in the trust but a separately recorded legal document. My sisters (4) and I were all named grantees . My oldest sister preceded my mom in death. It lists us all as tenants in common not joint tenants. There is no language in the will or trust mentioning my deceased sisters share should go to her husband or daughter. What happens with her share? He was never listed on the deed as grantee.
Thanks for the compliment. Most attorneys proceed with the belief that there is a probate needed for the deceased child. It is one of the risks and is why the Grantor (personal signing deed) needs to go back to see attorney if person receiving (Grantee) were to pass or there could be language in the deed covering this issue, but rarely done in my experience. I believe a probate administration will likely have to be done for deceased brother. All of this information is affected by a review the deed, will, trust and other items. You should seek legal counsel.
If a beneficiary is listed on a Lady Bird Deed along with other siblings, can one individual do a disclaimer to be taken off as a beneficiary?
I would strongly urge you to seek legal counsel. A grantee on a deed can transfer their interest, but someone would have to see the original deed to provide legal advice. If in the Great Lakes Bay area we can assist.
Can I transfer an enhanced life
estate/ ladybird deed if my mom is
on Medicaid in a Nursing Home , and
I’m her totally disabled son who lives
In the property for the last two years
I’m the only one who named to have
her house pass to me , plus have
POA
We would suggest that this not be done without attorney advice by an Elder Law attorney.
With regards to transferring moms house to my name we need an attorney in Jacksonville, Fl who will no t barge a whole lot to help me transfer the property I rt to my name
I would try Renee Nesbitt.
thank you Darrell
Its a living trust.
Also a lady bird.
So asking again
If mother is put into
A home or money
Runs out, can power
Of attorney step in
And sell it on me?
Without seeing the documents I cannot fully respond. It would say that an agent under a power of attorney could sell the real estate even if there is a LBD under the right circumstance.
Does the “Lady Bird” uphold in the State of Florida?
It is my understanding that it does, but you may wish to contact Attorney Renee Nesbitt or Attorney Tara O’Connor to discuss. They do work with us and are good resource.
Good Article. Will property uncapped in a living trust if left to a non close relative. Thank you.
The way the current IRS Code and Regulations are written, it is my understanding that a “stepped-up” basis will pass to person receiving. However, President Biden has discussed removing this tax benefit, which would have a huge affect on the value of assets and tax consequences to the middle class.
President Biden is considering changes to the stepped up basis. However, to say it would have a “huge affect[sic]” this would be referring to the figure from the Urban-Brookings Tax Policy Center & Census, To put the number of estate tax returns filed in perspective, the Population Division of the Bureau of the Census estimates that about 2.7 million people died in 2019. Thus, an estate tax return will be filed for only about 0.15 percent of decedents, and only about 0.07 percent will pay any estate tax.
It is not so clear cut, repealing the step-up in basis would also increase the compliance burden for heirs, who would have to verify the original cost basis of property upon a decedent’s death. However, you want to encourage savings and not double tax any group (even if this is a rare few).
We appreciate your opinion. For my clients, the tax change will have a “huge effect” and will surprise most middle-income families when they go to sell assets. If you are a CPA or Accountant, I would believe you would understand that significant difficulty in justify a “basis” in the property. Further, what the risk of dealing with the IRS. Finally, the Estate tax was raised to a level that exceeds most middle-income wealth, but if lowered to zero or even 1.0 million, most individuals of the middle class will pay taxes at rates starting at 45%.
Appreciate your input.
Hi,
I am also interested in why is a lady bird deed “not preferred when there is a sizable unpaid lien on the property?” Specifically a residential home property valued at $180k with a $25k lien.
Thank you Sir!
Hi! Can a LBD be established if my mother has been declared incompetent? Can someone with DPOA sign for her designating themself on title? Thanks.
Typically yes, but if the agent or attorney-in-fact is also a recipient under the LBD, then need to be careful as it could be viewed as acted in violation of fiduciary obligations.
If you are in the Great Lakes Bay area, we can assist you.
Does having a LBD (all children named) on my home with homestead exemption in Florida prevent my children from having homestead exemption in Florida?
I would suggest contacting Renee Nesbitt in Naples, Florida is you are on the Gulf side. We are not licensed in Florida and cannot that kind of specific advise.
What about the contents of the house are those included in the ladybird deed? I lived here prior to death and received it in a ladybird deed?
There is no implied right to the contents, as that is personal property. If there are specific items that are yours, then you may need to prove so.
What do I need to do to have the contents of my home left to my beneficiary?
Not sure what you mean by beneficiary specifically. If it is whom you wish to leave an item to, in Michigan you can do a holographic document to list where certain personal items will go to.
On your website, Shanna asked about the contents of a
property inherited with a LBD. Could you expand on that
answer, specifically: I want personal family items to go to
my daughter. She only has my verbal promise. Not proof,
right. She intends to sell the property, fully furnished. So
that means there are two kinds of personal property. Will
she be able to get her personal items and then sell the rest without requiring anything legal other than the LBD?
Personal property can be conveyed in general in adeed, but that is not how we normally do it for several reasons. We prefer to use a separate list for personal property and reference such in a Will.
I was deeded the house/property of a lady I knew for 21yrs who was like a grandmother to me as of Feb 26, 2022. There was no will, no additional means of legal proofs and she never was married nor had kids. Her closest kin would be some cousins on her mother’s side. Everyone else is dead. No one has stepped up nor wants to settle Judy’s estate. I inherited the house (one attorney locally said that the contents also go with the property-as long as they are not considered assets to the estate (such as vehicles, jewelry, etc.)) I understand this. However, all her friends and family have told me that they only want pictures and nothing else. They all told me that Judy told them that she wanted me to have her place. All friends and family who want something, I am happy to work with them. Am I violating anything by selling, giving away and donating things in her home as I am cleaning up? Do I have to consult someone legal? Is it even my job? It’s so complex.
You definitely need legal counsel. If in Michigan and in the Great Lakes Bay area, call one of our Firm locations.
I am living with my partner and we are not married
He has changed our mortgage to a Lady Bird deed.
Since my name is on the mortgage, his daughter and son will have instant ownership due to the Lady Bird deed.
Will I still be responsible for the mortgage payments as my name is on the mortgage?
Thank you.
Carol Childers
I am sorry, but he cannot change a mortgage to a ladybird deed. They are different legal documents doing different things. If you signed the mortgage note, you will be liable. You should seek advice.
My friend gave me title to house but he didn’t sign it. But my signature is signed on it . Now my friend Mr.Brown has passed away. Is this deed still good
Most likely not. I would ask an attorney to review.
I have my property in the Lady
Bird plan. I need to give my son
4 acres. Am I allowed to do that
and how do I go about doing it?
Thank you
I am thinking you meant “lady bird deed”, but nonetheless, you can give property away if the deed is properly prepared. I cannot give this type of advice to you without reviewing deed and knowing more about your personal financial, health and planning picture. Sorry.
If you wish us to assist, please contact one of our Firm locations.
When filling out a lady bird deed in Michigan do
You have to put a tax code on the forms
Yes.
My husband was a 100 %d
isiable from the military
Since he has passed away
I get the home owners tax
Exemption. If I have the lady bird
Will I still be able to get my
Property tax exemption. I live in Texas.
I believe that is accurate, but you should ask Texas attorney.
If an individual who owns the property, but has a ladybird deed listing his cousin, has to go into an assisted living facility, would the house need to be sold to help pay for his care?
There are many possible issues with this situation. Medicaid could pay for part of the assisted living, as could a Veteran Administration benefit. Short of both of those, you might have to sell to pay for care. I would seek an analysis from an Elder Law attorney.
Hi, I am a hospice social worker and a lot of my patients already have living wills that designate beneficiaries on their homes and who it will go to at time of death if they use Medicaid caregiver services and they have MERP and need to protect their assets. Do they need to do a ladybird Johnson deed as well?
It would be a good idea to consider.
if there are some unpaid taxes on a property and the owner is in a nursing home can we use a lady bird deed to keep my grandmother’s home?
Does Lady Bird deed cancel tax
Abatements? ie VA tax abatement
I would like to know if we use lady
Bird deed in Texas, does this will
Affect SSI low income benefit on my
Parent?
Thanks
We are not licensed in Texas, but under Michigan law it would not affect SSI I do not believe.
To my understanding it would be rent. I would consult a tax advisor for clarification, as we are not tax attorneys.
I have a mortgage on my home and am interested in your response to this question. Thanks in advance for your professional advice on this topic.
What State do you live?
Our office in Michigan. If in Michigan, we can assist.
My mother had a Ladybird deed on her property naming myself and my 3 brothers. One of my brothers died before my mother. She has now passed. What happens to my deceased brothers share of the property?
It depends on the State having jurisdiction. The best thing is to order a title insurance policy to see what the title examiner will require. In my experience, an Estate for your brother, depending on how long before your Mother that he died, will have to be opened to deal with his interest.
If you are in the Great Lakes Bay Area in Michigan, we can assist you.
Hope this was helpful.
TWO OF MY 6 HEIRS HAVE PASSED AWAY, SO WILL THIS AFFECT MY LADYBIRD DEED WHEN I EXPIRE????
Depends on what the deeds says. Would need to see it. The two would possible still receive, but their share would go to their children or issue. Depends on terms.
If a mortgage is in
Forbearance or foreclosure,
And there is a LBD in
Place, the homeowner
Dies. Is the beneficiary
Of the LBD responsibility
For the unpaid mortgage?
Yes.
My question is
My mother has a lady bird trust
And have a home with my name and
Her name on the deed.
My brother also has a home the
Same way but mom is living there
And my home is rent money for her
Until she passes.
My brother is power of attorney
So control of all bills and accounts,
There is some money still in the trust
But some being used for home care,
My question is can my brother step in
And sell my property which has my
Name and mother’s name on the deed
I believe you are mixing legal concepts, as at least in Michigan there is not something known as a “lady bird deed trust”. If your name is on the deed with another party, it is unlikely he could sell it, but I would have to see the deed to confirm ownership type. If you are in Michigan we can assist, otherwise, I would suggest a short consultation with an attorney.
I would also like the answer to her first question. Is there anything in Michigan law that would change the step -up basis?
“Stepped-up basis” is more of a tax issue, then a LBD issue. It is not based on Michigan law, rather on the U.S. Tax Code. While not being a tax attorney, it is my belief that a LBD can give to the new owner a step up in basis for the real estate. Please review President Biden’s tax plan, as it contains provisions that could take the powerful tax benefit away. You may want to watch our Facebook or Blog posting for an article about this soon.
I have a lady bird deed and
I am in the state of Florida
Can a lady bird deed contested
If the in one next of kin such
As my brother?
Sure. If the LBD was signed when the person was unduly influenced, was incompetent or was lied to get them to sign. Each State has certain basis to make deeds in valid as well, so you need to consult with local attorney.
There are three siblings on a ladybird deed for our mothers house. If one of my siblings dies does their share revert to the remaining siblings onthe deed?
Depends on the rest of the language on the deed.
I have property now and want leave the house to my daughter and grandson. I had this property since 2002 and about to get married 09/2022. Do I still have time to do the lady bird now?
Yes you have time.
Did you get your question
Answered about the lady
BURG Deed
“Since you wrote this article on June 17, 2016 and it is now March 26, 2018, I’m wondering if anything has changed in Michigan law that would cause property to NOT receive a step-up in basis at the owner’s death. i.e. Is the step-up still applicable?
You state in the article “Use of a Lady Bird deed is not a preferred method in some situations, such as when an owner is likely to die leaving a sizable unpaid lien on the property.”
My question is why is this so? Why is a lady bird need not preferred when there is a sizable unpaid lien on the property?
What was the answer?
Ty Dannielle
A step-up basis is from Federal tax law. In 2020 during the Presidential election, President Biden threatened to remove this tax benefit if his tax changes were made law. That never came to pass, so it still survives today.
Unpaid lien does not make the new owner responsible, but it also does not give the new owner any say or access to the financials that led to the lien (mortgage for example). If the residence has little to no equity, the lien will be called in. The owner under the LBD also could face a judgment lien, which would run with the land and not make it beneficial to own.
Does a ladybird deed override
a criminal restitution lien
on your home
Great question. If there is a lien on the residence, then LBD to my estimation does NOT override.
The lady that has my power of attorney had a Lady Bird Deed drawn up, and she had my property deeded to herself and her heirs. My three children were no mentioned. The lady knew that the property was to be sold and the proceeds divided between my three children.
What can I do? ASAP as my heart is very bad and I am 87?
Contact lawyer immediately. In Michigan, it could be a clear violation of the fiduciary duty imposed under the power of attorney!
Why would a buyers bank
Need a copy of the lady
Bird trust from seller?
Not sure what you are asking. LBDs are not in a trust typically as the transfer of a LBD is based on the death of the original owners typically.
Can a POA and/or sign a lady bird
Deed for the owner of the home.
And should be noted. The POA
Is also in the trust as POA, successor,
And the 100% beneficiary. And the POa
Is also the guardian. This is in hopes of saving
The home down the road from
Medicaid after being in a nursing home.
Yes, if done correctly.
Can the person named on the lady bird deed
continue to make the same payment or do
they have to get a new mortgage in their
name if they want to keep the house?
I will depend on terms of the mortgage. There is normally a “due on sale clause”, which can require that upon the death of someone the loan can be accelerated or called in.
Does the beneficiary of ladybird deed, if they choose to keep the property, have to get another mortgage in their name or do they keep paying the same mortgage as the deceased.?
Wow great question. Typically, the transfer will trigger the “due on sale clause” in the mortgage I would say. This will allow the Lender to foreclose or demand payment, as the remainder persons that got the property were not the party that the Lender relied on to give the loan. One might get away with it for a “long” time, but eventually could be an issue, especially when the insurance company insures the interest and the Lender sees that their “mortgagor” is deceased.
If you are married can one are the other put their property in thier name so the other one in the nursing home can get Medicaid.
Yes and No. It needs to be done a certain way, otherwise if probated after the death of the surviving spouse the State of Michigan can acquire a lien.
I’m on a Lady bird deed. The owner is still alive. We are not married but have been together for 20 years. Am I able to change the locks to the main doors?
Way more to his then simple yes or no. You need legal counsel.
If some does a LBD do they have to file it somewhere? And if so how could a person find out about it if a person is deceased?
Normally filed in County Register of Deeds, at least in Michigan.
The lady I take ca
When she passes I can stay here but I don’t own a house but she has a son that I think that has more money and lawyers than me can take it is that truere of left me a ladybird f her house
Not sufficient facts for us to respond. Sorry.
Can the Lady Bird deed list both husband and wife as grantors or do we need two separate ones?
No, the ladybird deed can list both husband and wife, and likely should in Michigan due to the creditor protections that Michigan law offers. This is a general response, as I do not know your specific family issues and assets.
If a husband and wife in joint tenancy have a ladybird deed, can they designate the survivor’s trustee to take and will property taxes be avoided if that trustee is a child?
Wow, really depends on what State you are in. Assuming in Michigan, then you can designate a trust. Property taxes can never be avoided, but could be minimized if done properly. Feel free to contact us if you are in Michigan.
Can LBD be changed if there’s a clause for a remainder after my death. I can live here until I die.
I would have to see the specific deed, as they can vary dramatically. The advantage of a LBD is that it provides continued control by the Grantor, so you should be able to change in most cases.
If we can assist please contact one of our Firm locations.
I received my mother’s house via lady bird deed after mom pasted I took full owner ship about 1 month later I gave 1/2 the house to my sister Now we are selling will I have to pay capital gains i know my sister will since the house was mine and I gifted 1/2 to her and the real estate agents are requesting a Death cert for mom at the closing they said it’s still a in a life estate which has me confused the lawyer that did the paper work said once your mother has pasted the house become la your free and clear ( it was paid off years ago ) I can do what ever I want to with it
Normally there would be no capital gains if you received the real estate as a result of the death. This would cause a stepped-up in the basis of the real estate. Without reviewing the deed, I cannot say entirely, but it appears your attorney is correct. Title Companies (some) are having issues with the “ladybird deed” and how to treat them.
My mom has a lady bird deed on her house and the house will pass along to me and my sister after my mom’s death. My sister wants me to have the house since I have done a great deal of caregiving for my mom. When the ownership passes to us via the ladybird deed, is there a way my sister’s name can be removed from the property. I don’t mind having her name on the property, but she is the one that doesn’t want her name on it.
Yes, you can have a proper deed prepared that would transfer any interest that your sister has in the property to you. This can be done when your Mother is living, but just remember that your Mother or her agent under a proper power of attorney could remove both you and your sister. The transfer deed from your sister to you would then be meaningless. She could wait till your Mother is gone to sign the same deed, but for your benefit in case she changes her mind or passes before your Mother, it might be best to have done before your Mother dies.
If you need assistance, contact any of our offices at your convenience. Not a costly venture over all.
My mother had a Lady Bird deed on her house which listed myself, and my two older sisters. Unfortunately, one of my sister’s passed away. My mother recently passed away as well. My husband and I would like to demolish my mother’s house due to severe foundation issues, and build a new house on the property. We are currently trying to get my sister, who passed away, her husband listed to be her representative. My question to you is….is it legal to start the building process on the property without being listed as the sole proprietor of said property? Both my sister and my brother in law are in agreement that my husband and myself should build there.
Please see our email to you.
Is it possible to list a beneficiary to the property with a life lease on the house only to a different unrelated party?
Thank you kindly
With any Lady Bird Deed, the grantor/grantee has the lifetime power to end the default beneficiary’s rights by conveying the property back to himself or herself, or designating a different default beneficiary. Also, if the grantor wishes to impose certain conditions or requirements to the default beneficiary’s enjoyment of a life estate, it may be the wiser course of action to spell these out in a trust and name the trustee of the trust as the default beneficiary.
What if the owner is diagnosed with
Dementia a year after the ladybird
Deed is issued? Can they still revoke it?
Is there a limitation under a ladybird deed
That the state can then go after for nursing home care?
Wow, lots going on. Sorry.
Cannot give you advice on this until know more. Dementia takes many forms and just because you are demented, does not mean you are not competent during some times. In Michigan, LBD’s are protected from estate recovery.
What more do you need. She is now living in a ho.ep and we are her legal guardians. Can the state go after her home for her deceased spouses medical bills?
If my mother adds my name to the deed on her home, and someone sues her, will they be able to sue me also? And thank you for your response.
Possibly. You have no interest that is attachable with the use of the “ladybird deed”. However, other forms of deeds do allow for a creditor to file a judgment lien or even more.
My aunt had a lady bird deed done in 2012 with me as beneficiary. A year ago I put the house in my name alone because she no longer wanted to be alone. And was placed into a retirement lime. I have live in the home with them since 2010. I just found out that her health is declining and the retirement home that she pays for is increasing her rent $300 more monthly. She can’t afford that. So my problem is that they suggested that we apply for long term care. How will that affect the home. Can Medicaid put a lien on the house if it is already in My name. Will I get penalized.
You need to seek assistance. There is likely to be a penalty if transferred into your name. Good news is something can be done to correct this and get things back on track. If we can be of assistance in this regard please call.
Would like to leave my
condo to my two children
via a Lady Bird Deed. Im
sure they would immediately
sell it and split the proceeds.
Do/should I list them as JTWROS,
or Tenants in Common on the
Lady Bird Deed?
My uncle has left me his house and land in a lady bird deed 3 years ago. In addition, in a will, he has left all his personal property to me as well with the exception of 20 acres of another property, making his 4 children as the beneficiaries. His 4 children have not been in his life for many years. We recently let his children know he is I’ll and so have come to see them (once) and have asked about his property. My uncle let them know it is in a lady bird deed to me. Can they argue or fights lady bird deed in Texas? He has made it clear these are his wishes to more than just me.
Is the land in Michigan or in Texas? If in Michigan, they would have to argue that you unduly influenced him, he was incompetent at the time or there was fraud involved. If done by an attorney, it is even more of an up hill battle. However, heirs will find motivation sometime in the amount or value of the assets being argued about.
My grandfather had a ladybird deed that left a home to four of us. The brother who was the executor of the Will hired a real estate agent and put the house on the market without any of us three knowing. He claims since he is the executor of the Will he is executor of the house… which I believe would be true if the deed was not present. Can he legally put the house on the market without our consent?
A great of assumptions are present. It is likely the PR does not know of the ladybird deed. PR would generally have no control of the real estate.
So happy to find this.
Does a ladybird deed Effect a non profit situation with in the family, (trust). Or have any leverage for unpleasant issues after death of parents? No other kids. I own my property free n clear.
Never heard of one until lately.? Need some advice. Thank you.
I would have to know more about your personal situation. Ladybird deeds can be done to fund a trust at death. If you want to discuss please call.
Can I do a Lady Bird Deed on an investment property (condo) we have a mortgage on in Florida? I am wanting the most simple and inexpensive way to let my daughter take over the condo and mortgage payment on it, in the event that both my husband and i should die. We live in Colorado but have this condo for air bnb purposes in Florida. Thank you.
I would contact Renee Nesbitt in Florida. She is reasonable and very knowledgeable. I think you can do what you are planning, but must be done by Florida attorney. Further, the mortgage likely has a due on sale clause, which could call in the loan when you die. The Bank does not have to accept payments from survivors, but often do.
I am guardian and conservator for my mother in law who had dementia and living in an assisted living facility. We did a ladybird deed for her property in MI naming her three sons as beneficiaries. My husband and I have lived in the home for 3 yrs and pay the taxes and maintenance issues on the property. We really need to do some major things such as electric, plumbing ….and basic upgrades ti the home. Can we use it as collateral for the funding of these projects? The home will eventually be ours the other brothers do not want to live here and wlll not argue over the property.
This is more involved. You could make improvements and have a lien on the real estate. The issue with improvements is that by doing them before an agreement is reached, the siblings could change their minds once the value of the real estate has increased. Our Firm has a trial next week on a similar situation. Be cautious and use an attorney to create the proper documentation.
My Mother LBD’d her house to my two sister’s and I. She passed, one of my sisters has lived in the home for the last couple years and I wish to gift her my portion of the house. What do you recommend?
Thank You.
I would likely recommend that you quit claim deed to your sister your interest in the real estate. As an owner, you have liability at this time for the ownership of the residence and the use of it. There is also the ability for your sister to make a principal residence and save some property taxes. If in Michigan, we could assist. Please contact Susan Williamson in our Frankenmuth office if interested.
Thank you for your article. My grandfather married again after my grandmother’s death. She has now passed. Her son drew up a Lady Bird deed after her death without consulting the adult children of my grandfather- my Mom and Uncle. Is this legal? Have my Mom and Uncle lost all claims to their inheritance as children of my granddad?
Would have to know more. If Grandfather was competent then likely enforceable. There are issues that arise such as undue influence, fraud, lack of capacity and such. When a legal document is done by a non-lawyer, there are more issues presented to challenge such.
Can a lady bird deed be used to transfer half ownership on a house when it’s in two people’s name? Example my mom and brother own the house and she would like it to be me and my brother upon her passing.
Yes.
Would you make a lady bird deed with one the parents name?
It depends who the owners are. Sometimes depending on circumstances it would be the option.
My mothers home is owned by her and my brother, my mother would like to have me added in the event of her passing. Can a ladybird be done on her half of ownership thereby leaving me and my brother as owners in the event of her passing?
I would have to see the actual deed, but assuming that it was done properly, your Mother would be able to change the deed without approval or knowledge of your brother.
my husband had a ladybird deed drawn up and a living will the house is to go to me when he passes do I need to worried about the debts he owes will I lose the house my sister seems to think that the ladybird deed is not a good idea.
Teresa –
I would have to know more, but generally the lady bird deed avoids creditors of the deceased spouse. There can be an argument for a fraudulent transfer to avoid paying bills, but when you are married he could add you to the house. I am concerned that you and your husband’s names should be on there now, as there is some creditor protection that applies in Michigan when real estate is owned by spouses. If you have further questions please call us at one of our locations.
Hi my husband and I are in the process of making a will now. Our situation is our house is paid off free and clear we have one child and NO debt wha so ever. We have one daughter want to put our home in a Ladybird deed for her to avoid probate of any type. My question is if we decided to use our house with a line of credit to purchase a small rv in husbnads retirement would my daughter have to go to bank and sign as well??? I called Bank of American which is were we do all banking they said they do not do loans if house has Ladybird deed. Should we NOT use a Ladybird deed. Puzzled on which way to go on will. Thank You so much for your advice.
These days banks are recognizing that Grantors (party signing deed to transfer on a lady bird deed) have full control of the property to mortgage, however, large banks remains like most other large entities… inflexible. You can deed the real estate to yourselves and once you get the refinancing done, transfer by a LBD. Nothing they can do about it. If you want us to assist let us know.
Is there additional benefit to having a living trust or will if you already have a Lady Bird deed on your residence and PODs on your bank accounts? My main concern is to avoid probate. Thank you.
There are plenty depending on your assets, family relationships, charitable intentions and on and on. LBD’s are just one part of an estate plan.
We have filed a ladybird deed on my mother’s behalf but it has not yet been completed by the court and she has now become terribly Ill and will likely not last another week. Will this deed still hold up if she passes prior to the court completing the deed?
Not sure what you mean “completed by the Court”, as the Court has usually nothing to do with it. As long as the deed was signed by her before her illness or death, the deed is still valid if “delivered” to you [given to you as a general rule].
My husband, his mother, and I all purchased a home together with all of our names on the deed. We had to consider a nursing home for his mother since then so we had a ladybird deed filed. I did not realize that doing that would remove our names from the deed, leaving only my mother-in-law’s name. Does this mean that we no longer have any type of ownership in the home and that she could either kick us out or sell it out from underneath us if she decided to?
It does mean you have no ownership any longer. There could have been other ways to do it if the deed was in existence for at least 5 years before she went into a nursing home. She could give you a life lease for her life time as well on the property. Give us call and we might be able to assist.
My wife and I live full time in our house in Georgia. Can we use the Lady Bird deed for our two rental condos that we own in Florida?
Unfortunately our Firm does not practice in the State of Georgia or Florida. I would believe it could be done and would avoid probate court in the State of Florida. I would suggest contacting a Floridian. We do work with several Florida attorneys and can refer you to someone if needed. Please contact us if we can be of assistance.
How to do a lady bird deed so the house cannot be mortgage buy the grantor or sold or rented
A grantor can always limit their abilities to encumber the real estate.
I am widowed, own my condo free and clear, and have no debt. I have 3 grown children and 3 grown stepchildren. One of my sons has a progressive muscle disease and lives with me. Another son will be his caretaker when I pass away. I want to name that caretaker son on a ladybird deed so that my handicapped son can remain in the accessible condo. I have been told not to leave the condo to my handicapped son because it would affect his ability to collect social security disability. All the children know and agree with my wishes. Is a ladybird deed appropriate for this?
Maybe.
The better route would be to consider a special needs trust, which would spell out what happens when your son with the progressive muscle disease would pass. The way you currently are considering could be disrupted if your son who is the caretaker passed before the son with the muscle disease, or a divorce occurred or a lawsuit occurred against the caretaker son. Many more risks can arise. I would not usually advise this type of plan. If you are in Michigan, we would be happy to meet to assist you or direct you to someone in your area that could help. The issue regarding his ability to collect SSDI is really related to his medical coverage, depending on his age at the time.
My mom and dad had a ladybird deed done a couple of years ago with me my sister and brother on the deed. Now mom and dad are both on Medicaid and in assisted living. My dad wants to take my bfrother off of the deed because he won’t come see them or help with anything. Is this even possible at this point We’re in Michigan.
Yes, this is possible, in my opinion. My answer presumes the original Lady Bird Deed was properly drafted, and that the residence is located in Michigan. Lady Bird Deeds are recognized as valid under Michigan Land Title Standard 9.3, and the DHHS Bridges Policy Glossary (at page 39) indicates that a properly drafted Lady Bird Deed is not a divestment. Both parents would still need to be competent to sign the new deed. I suggest that the new Lady Bird Deed reference the prior recorded Lady Bird Deed and include a statement that the grantors are executing the new deed for the purpose of removing brother as a beneficiary upon the death of both grantors.
Are lady bird deeds still applicable, now in late 2018? Or have the Medicaid laws changed thus rendering these as unusable?
Still valid in Michigan.
If I am a remainder on a lady bird deed can I be held liable if the grantor is sued for some property related issue? My father owns property with a pole barn and rents out space for storage of boats and RVs. He has only homeowners insurance on the property. If the barn burns down, could I be held responsible for the lost property?
I would say no based on your information, as you do not have a vested interested until he passes. After, his death you would need to remove the items or be liable or get the proper insurance. Could require storage insurance of the individuals keeping their items there.
I live in Florida and my husband is in a nursing home . I was just told about the ladybird.
My question is could I do the ladybird and leave my home to my son even though my husband has not passed away yet. And what attorney can you recommend in the state of Florida in the Orlando area.
I believe you could accomplish what you are trying to do. If you email me at dzolton@zoltonlaw.com I will get you two names.
I age 82, on social security and medicade,because my income does not cover expenses that I need and my account with Medicare is large. I have lots of medical issues. What will happen if I use a Lady Bird deed on my home to leave my home to my granddaughter. Will Medicare sell the house to pay my bill and also the taxes I owe on the house?
You can use a properly drafted Lady Bird Deed to leave your home to your granddaughter and doing so will avoid probate and, under present law, also avoid Medicaid estate recovery. Currently, the State of Michigan can seek reimbursement for lifetime medical expenses it paid for you through the Medicaid program only from assets in your probate estate. There is no estate recovery in the Medicare program, which is different than Medicaid.
Medicaid laws and rules do change over time. You need to keep in mind that there is no guarantee that Medicaid estate recovery in Michigan might not be expanded in the future to apply to more than just probate assets.
Property taxes are a different and separate matter. If they are left unpaid for too long, the home will become subject to foreclosure by the State and will be put up for tax sale.
My mom had a ladybird deed on her house. She left it to my sister and me. My sister wanted me to have the house outright since I cared for my mom for many years. After my mom died, her attorney did a deed transferring ownership of the house to just me. Around the same time, I received a Medicaid Estate Recovery Questionnaire. It asked if my mom owned a house. I put down “no” because the house transferred to us after her death. Now the third party liability department wants to see a copy of the deed. Why would they ask for this? I thought the house transferred automatically upon death.
If you are in Michigan, we can discuss. I would rather not give you specific advice without knowing more. I would say this, normally you DO NOT have to give anything to the State of Michigan. They use the fact that the citizenry does not know their rights to gain access to information that they are not entitled. I would not give it to them.
I am a only child my mother has a Ladybird deed health is declining I am the beneficiary do I have the right to sell property while she is still alive,
Generally no, unless you have a POA. Reasons not to do it. Would suggest you seek legal counsel.
Hi, I have been married for 14 years, and my name was never put on our home (However I have lived in the home since it was built in 2000 with my now husband.) I have since learned my husband has accrued significant debt as well as purchased two rentals properties. one lost due to back taxes, without my knowledge until after the fact. I am unsure how to proceed. Would requesting a LBD be a good idea to approach him with? I worry because if something happens to him, I not only acquire his debt, and will be left to fight for my home in probate. Thank you.
Assuming you are in Michigan, there are significant benefits for creditor protection when a residence is in the name of you and your spouse. His individual creditors, with some few exceptions, cannot do anything to force the residence to be sold. Of course his personal bankruptcy may be an option, but the house will be an asset considered to be available to the creditors. I likely would encourage him to put your name on it, but without knowing more about it, that would be just general guidance. The house would be probated. We can assist if you need help or could refer you to someone that could assist if you are not in the Great Lakes Bay area. Thanks for scoping out our website and blog.
My mother left her home to me via lady bird deed and she recently passed away. I’ve been working with the bank, her mortgage company, for weeks trying to get her mortgage transferred or learn how to get the mortgage in my name. They won’t return my calls. How to I enact the lady bird deed aside from signing it? Do I need to register the deed somewhere? How do I assume the mortgage for what was owed?
If you are Michigan, then the real estate was taken by you with the mortgage on it. I am not sure if the deed has been recorded yet? This could make a difference. Either way, the bank or mortgage company does not have to work with you. Would seem logical that they would, but they do not have to. You may have to get the loan refinanced, rather than assume it. Let us know if we can help.
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Myhandicapped mom’s Michigan home was Lady Bird Deeded in July 2013 to her 3 daughters. Mom now has Alzheimer’s Disease and has come to live with me in Florida as of the end of January. She has no money in the bank, but her $125K house is free and clear. With her social security check, we were paying for in home care and utilities and taxes before she moved in with us. The 2 sisters in Michigan said they are done caring for mom.
If she is living with me in Florida but still owns her house and pays taxes in Michigan, would she be eligible with Medicaid in Michigan? Could we rent out the house to cover the expense of keeping the house-ie, taxes, insurance, electricity, etc.? Would the rent prevent her from being financially eligible for Medicaid? Can I apply for Medicaid in Florida for her if she still owns a LBD home in Michigan? Long Term Care will be needed as the disease progresses and we no longer can physically meet her needs.
I am overwhelmed with the care mom needs, but throw in the financial demands, and not knowing who to consult for help. We had a free consultation with an elder law attorney in Florida and she said that she wasn’t familiar with Michigan laws. If we applied for Medicaid in Florida, do we need to put the house up for sale or do they honor the LBD? Thanks for your help!
The answer is no. She would have to apply for Medicaid in Florida where she resides. Generally, the home can be rented, but Florida’s Medicaid laws would apply. An Elder Law attorney in Florida should be able to answer your questions. I believe the residence should be able to be protected. If you need assistance finding someone in Florida, let us know.
Is a Lady Bird deed good for a couple in there mid-60’s with a lot of property other than there home vrs,s a Trust. Thank you David
We are located in Ohio. My father added my name as second owner to his property deed 2 yrs ago to eliminate going through probate in the case of his death. Is it possible to change it to a Lady Bird deed with him as owner and me as the beneficiary and if he were to have the need to go into a nursing facility and apply for Medicaid would this protect the property from being claimed by Medicaid estate recovery lien after his death?
if i have durable power of attourney and a ladybird deed wit both me and my brothers name on the ladybird deed as durable power of attourney what hapoens when there us a 85000 dollar balancw that is both a first mortgage and a home equity on it also
Would like to leave my
condo to my two children
via a Lady Bird Deed. Im
sure they would immediately
sell it and split the proceeds.
Do/should I list them as JTWROS,
or Tenants in Common on the
Lady Bird Deed?
Under Michigan law, ‘joint tenants’ has a different legal meaning than ‘joint tenants with rights of survivorship.’ In general, we would not recommend ‘joint tenants with rights of survivorship’ on a lady bird deed because if a disagreement were to arise between your children after your death about how to dispose of the property, this language would generally limit the disgruntled child from filing a partition action to force a sale of the property while his sibling is alive.
The better choice is between ‘joint tenants’ (excluding the ‘with rights of survivorship’ language) or ‘tenants in common.’ If the condo is left to your children as ‘joint tenants’ and one of the children dies before the current owner(s) are all deceased or before the children get around to selling the condo, then that child’s interest is extinguished and complete ownership will belong to your other living child. If you leave the condo to your children as ‘tenants in common’ and one of the children dies before you or before the condo can be sold after your death, it is assumed that upon your death the deceased child’s half interest would be an asset of the deceased child’s estate which may then have to be probated (although no Michigan court has yet to rule on this question).
It would be advisable to consult with an attorney to discuss all possible consequences before making a final decision.
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Just came across this article and am optimistic about an estate planning issue I’ve been having regarding my Michigan real estate. My wife and I have owned our home for over 30 years and Local Property tax increases have been limited by State Law for us for a number of years. But the township property assessor closely looks at change of ownership in order to increase the property taxes on the property. If we change our ownership on a deed from us to that in a Ladybird Deed will (1) the property tax assessment go up for us while we still own the property, and (2) will our natural children heirs to the property be subject to increased taxes as a result of receiving the property through a Lady Bird Deed?
My husband and I reside in a house on the same property as his parents’ home. His parents (now one is deceased), had executed a gift deed with them keeping a life estate, to my husband as his sole and separate property. What are my rights to the property as his spouse, because our home is located on the gifted property, and we have been maintaining and paying taxes together on our home for over 30 years?
My husband and I reside in a house on the same property as his parents’ home. His parents (now one is deceased), had executed a gift deed with them keeping a life estate, to my husband as his sole and separate property. What are my rights to the property as his spouse, because our home is located on the gifted property, and we have been maintaining and paying taxes together on our home for over 30 years?
What about reverse mortgages do those work with the LBD.
Yes. But debt still on the property.
My mother has been in a nursing home for 4 years with dementia. Four years ago I was given full guardianship and she had 60 acres with a home that is under a ladybird deed. My wife and I are going through a divorce now and I was wanting to know if I could use the 60 acres as collateral for a loan to pay my wife a cash sum for the equity in our home and as a settlement to end our marriage? We are in Texas
Cannot give you advice about Texas law. Generally the answer would be no.
Very
good article was very helpful Can you please tell me where I would find a copy of my trust I don’t have it in my lawyer is out of business. Thank you in advance
Wow, if cannot find trust you need to take immediate steps to restate.
My father owns a home that had a Heloc on it. The Heloc is in 1st postion. Last year he had to draw 20K for his rehab. Prior to his long stay in rehab he his water pipes burst and ruined the water heater and furnace. At this point his home is not livable but we have an outstanding loan. He has been placed in assisted living and financial cannot pay the loan. Comparables in the neighborhood are valued at 5k (with working furnace and water heater). My siblings have no interest in the home. I own a home next door and would be willing to fix it up and make it a rental. My concern is that my fathers health is deminishong and he will need to go on medicaid soon. If he signs a lady bird deed tamd deeds me the property will i have issues with the heloc. Or should I let the house go back to the bank and tey to negotiate a settlement as it will cost them more money to foreclose then ehag the home is worth
This is very complicated for an email. The loan documents are important to see if there is a due on sale clause (or transfer). You can rent it out to pay for the expenses for the home and repairs. You could get an appraisal and present it to the bank to see if they would allow you to purchase from Father on a discounted mortgage balance.
What happens if I still have a mortgage on my house when I pass, and I have a lady bird deed made so that my domestic partner gets the house without going through probate. He is the beneficiary of my life insurance and 401k. Can he easily assume the mortgage and pay it off with the money he’ll be receiving so that he will own the house free and clear? We’re in Michigan.
He would take the real estate with the mortgage on it. Assuming the mortgage would be up to the Lender. Can always pay it off.
My mother in law passed away in April of this year. She had a ladybird deed and left the home to her 2 sons and 2 stepsons. The sons were in the process of selling her hime when one of her sons was in a motorcycle accident and also passed away in June.
How do we continue with the sale of the house?
If you are near one of our offices, we can assist you. There would have to be a probate administration and the Personal Representative would sign.
My kids are 11 , 8,and 5 y
Yrs old , can I do a ladybird
Deed to them for my house.
that is located in Michigan
Thank you
Yes, but if you pass our children would have to have a conservator appointed to handle their finances. For minors, better options is trust.
Does this only apply to the state of
Michigan ? I have family members in
Louisiana.
Louisiana has French law, so likely different.
can I claim a house on my taxes that is from a ladybird deed? my father cant claim his house since he makes no income and sine in his remainderman I was wondering if I can? he bought the house using his VA, and I paid gift money for him to purchase it. he can’t afford it, my father allowed me to use his VA to purchase a house. so its in his name but its mine. since I cannot be added to the deed due to the VA rules without it becoming due at once, so we went the Ladybird deed route to protect it.
No. You have no ownership.
Does a Lady Bird Deed override a will? A Lady Bird Deed as done on my grandmothers home in my mothers and aunts name. When the will was read after my grandmother passed away my mother was willed the home.
LBD does over rule a Will. Only assets that go through Probate Court in Michigan are distributed as stated in Will.
My mother is the sole beneficiary listed on her fathers property via ladybird deed. Her fathers Will states propert is to be split 1/3 between her and her 2 siblings. Is my mother protected in Michigan as she is on the ladybird deed?
Thank you,
Jack
Loaded question. Not an easy answer. Example, someone could challenge if the intentions were her to act as a fiduciary or trustee and distribute property after death. Would need more information.
In Texas my brother is listed as owner of the home our mother lives in for the past 15 years. He wants to do a lady bird deed transferring ownership to our mother and hoping the taxes will be reduced since she’s over the age of 65. Can this be done and how would we record this? After she passes, would ownership transfer back to my brother?
I would contact Texas attorney. Typically, a LBD could be used where it would go to your Brother at her death.
My parents’ home was put into a Lady Bird deed last year to myself and two siblings. The house in located in Michigan and none of my siblings including myself have lived in the house for 20+ years. My parents have now passed away and the house is up for sale. Once the house is sold what is the proper way to receive and account for taxes when dividing the profits 3 ways?
Joe – I would suggest speaking with a CPA. There is likely to be no capital gains on the sale. If it is a FSBO (For Sale by Owner) was might be able to assist you. Call any of our offices if we can help.
My wife and I are currently in our late 50’s we own a house in Michigan and a condo in florida. We have two daughters. We would like to have the condo left to one of the daughters and the house split 50/50. Not sure if it is best to set up a lady bird deed or put the condo in a trust fund.
Would need to more about your estate plan overall. If there is a trust could work. The issue is that the home is protected from Medicaid recovery in Michigan as the current law stands, but your condo in Florida would not be, unless other steps were taken before going into a long term care facility. Should meet with Elder Law attorney. If we can help let us know.
To clarify, a LBD can only be used on your homestead (home and maybe a few acres). It cannot be used on multiple properties?
Thanks! Great article btw!
Yes and thanks.
I have 3 children I would like to leave
my house to. Would the three of them
have to Go together to record the
death
certificate and file a Property Transfer
Affidavit with the local assessor?
If this is Michigan property we can assist. No only one of them needs to file death certificate and transfer affidavit.
My parents have a revocable living trust, and their home is deeded to the trust via a quit claim deed. Should we still file a Lady Bird Deed (Michigan) for the home?
Yes could be a reason to do so depending on what other assets they have and other factors. The should ask their estate planning attorney.
When my father died back in 1999, my name was added to my parents house in Michigan. Now we are getting to the point that maybe a nursing home will be needed soon for my mother. Would a LadyBird Deed help me, or because I’m already a joint owner is the house protected.
House is likely partly protected if it has been in your name for more than 5 years or could be entirely protected if it is your parents residence.
If I put my four children on a Ladybird deed for my house, upon death does a new mortgage have to be taken or can the existing mortgage stay in effect until sale of the home especially if all agree one of the children would reside in the house until they decide to move and if so can you put a time limit on the amount of time that would consist of. Would the second part be put in a will or does the Ladybird deed trump the will on specifics.
Generally, when one dies there is commonly found in a mortgage what is called a due on sale clause. This clause also can consider the death of the principal debtor to be a default and they could call in the loan. Most banks don’t want the house or property and will work with the family, but not all. Your children will not have any control unless the bank allows such.
I am in Texas. Does a Ladybird Deed give the named beneficiary the right to sell the property while the owner is living? My significant other was told it would protect him beyond the will while his mother is alive, therefore giving him the right to sell the home while his mother is living. Her current home is in disrepair.
Disclaimer: I am not a Texas lawyer. Each State has different laws on this. I would say however that normally a LBD does not give the remainder person the right to sell.
Thank you. Would it protect against other children selling the property if there is a remaider named in an LBD?
Most likely.
My husband passed, no will. I own the home. Our deed is listed as his name AND my name. I live in Michigan. I want to setup a lady bird deed for my children.
Do I need to have his name removed from the deed before I file a ladybird?
Sincerely,
Leslie Tate
First, I am sorry for your loss.
Second, yes you do need to remove his name, but the good news it is relatively easy and inexpensive.
Finally, can we assist you?
I have a question not a comment. We live in Michigan, my husband and I have been married a week. I just found out that he did a lady bird deed to his son for the house he owns and we will be living in. He did it 2 days before the wedding. I had only asked that if he should pass before me that I be allowed to live in the home until I decided to leave it or I passed. We are both over 70. He didn’t do it. Do I have any legal options for stayin in the home if he should pass before me? I don’t want to take the home only live there.
Based on the basics the answer may be no. You would have no interest unless you have a prenuptial agreement or some other written agreement that you relied on to marry. You could actually be evicted under some circumstances by the new owner.
This information is being provided not as legal advice, but for educational purposes only. An attorney would need additional facts and information to provide direct advice.
If 2 married persons own a home in MI, can one person draft a ladybird deed for him/herself when the other person has a trust?
Would have to see the deed and how worded. The basis of a LBD is that if one of the owner’s dies, then the other owner owns it and can do what they need to or want to with the real estate. The fact that the other married spouse has a trust may be irrelevant. If you are in the Great Lakes Bay area we can certainly meet with you to discuss or email me privately to refer you to someone in your area of the State.
Can a relative, who is a Michigan resident, grant his real estate to me by means of a Lady Bird Deed without my permission or signature? If this is possible, is there a way to remove myself from the LBD? I am not a Michigan resident.
Great question.
Generally you have no right to anything with the LBD. You are in name only and can be removed by the conveying part at anytime. This is what makes a LBD so beneficial and unique.
My mother, 94 yo, has been in a nursing home in Texas for 4 or 5 years. She is on medicaid for this residency. Her home has no mortgage. My brother and I are interested to see if a LadyBird can be filed after she is already on Medicaid. I’ve read all the questions above and none seem to be anywhere near what our situations is. The question, of course, is can we still file for LadyBird after she is already on Medicaid coverage in the nursing home?
thank you
LTC Ron Watson, USA ret.
I believe you can still transfer while in facility, but would need to speak to Elder Law attorney in your area.
My grandmother added her son to a Lady Bird Deed. She since has decided that she wants to leave the house to all three of her children. Her son will not willingly sign anything. Can she do a new LBD adding her other two children without his consent?
If you are in Michigan, we can assist. If it is a true LBD, she can do what she wants assuming competent and not improperly influenced. Benefit of lawyer doing it for her.
My father was married to my stepmother for 43 years – she passed away a year ago. She never had my father’s name added to the deed – so upon her passing, he established homestead in the home (he paid mortgage payments over the years) – but with joint tenancy (instead of life estate) since she had surviving adult children (50%/25%/25%). Can a Lady Bird Deed be done (naming his adult children) since the current deed is joint tenancy? Florida is resident state.
In Michigan he would own the real estate. I would contact Renee Nesbitt in Florda. She might be able to assist you. She is on the Gulf side.
My father has three properties and 3 children. He would like to do a lady bird deed for each house giving the 3 of us our own property. My question is if his wife our step mother is still alive when he passes can she lay claim to any property?
In Michigan, it is likely that your Father can do as he wishes. We no longer have “dower”, which would have required in most cases a “woman” to sign off. This is general information and we would have to see the deeds to verify your information obviously, but it would appear your Father could do what you are inquiring.
Is there a time limit between when a person files an LBD and when they apply for Medicaid?
Depends on the State where the Medicaid is being paid out. In Michigan, you can do a LBD even if in a nursing home as there has not been a transfer of ownership.
If you are in Michigan and we can assist please contact us. If you are in an area not serviced by our office, please let me know and we will suggest someone for you to speak with.
In texas,
is there a serious issue w/ passing the home through a Ladybird when there is a mortgage for about 33% of the value?
Thanks
We are not licensed to give advice in the State of Texas, but it would not make any difference in Michigan. I would suggest speaking with a Texas attorney.
Can a Florida resident use a lady Bird trust on real estate property in another state ????
Wow. You have a loaded question there. A lady bird deed is used regarding real estate, it is not a trust. If you want to fund your trust with the LBD you can do so in Michigan. I would suggest contacting an attorney in Florida to inquire if what you are wanting to do is allowed. I can provide some names of attorneys that we have used with clients in the past if you wish. Just contact me by email.
Our mother drew up a will in 2012 giving us all 9 children her property . In April of 2016 she drew up the Lady Bird Deed in place of the 1st will so we wouldn’t have to probate. She named all of us 9 children as Grantees of her property. Our mother passed in Sept of 2016. After my mother passed we spoke briefly about selling the house but no legal steps were taken to start this process. Since her passing the house is being rented by a family member and his family. One year after my mother passed one of my sisters passed in 2017. Her will is still in probate so we were told we cannot proceed with the sale of my mother’s until my sister’s probate is completed. Last week we found out one of my other sibling is taking us to court. Since I am the oldest I was given the original Will of 2012, and the original Deed of 2016, so I was served last week to take the original documents to Probate Court. This legal document read she is filing an ” Application to Probate and Amend Copy of Will and Issuance of Letters for Dependent Administration”. We don’t know what that means or what this entails. We were under the impression that the Deed supersedes the first Will. The
majority of us don’t want to go that path of having to go to court that’s why our mother changed her disposing of her property to us with the Lady Bird Deed. Can what my sibling is trying to do be changed. What options do we have? Please advise
First off, our Firm is only licensed in Michigan so consider this a disclaimer. If you are in Michigan, then you should retain an attorney.
Second, if the 2012 Will is consistent with what was done in 2016, and your Mother was competent, then the deed should withstand challenge.
Third, a decision should have been made about this property long ago and that might be what is happening here. You could buy any sibling out and remove their ownership thereby. OR, you could possibly force it to be sold through a real partition action. If you are in Michigan, please call us or a local attorney.
If my mother has a ladybird deed on the house and has filed bankruptcy – can the bankruptcy court still use her house as an asset when she passes if the deed has been transferred to someone else under the ladybird deed?
While we do not handle bankruptcies, presumably your Mother has gone through bankruptcy and has exempted her house. Once through bankruptcy she will likely be able to do what she wants with her home, including a LBD. If a Bank has a lien on the house, the persons taking under the LBD will have to deal with the lien.
can I ladybird deed my home to my daughter and son-in-law have three children but will lbd to just the one and husband
Nice thing about LBD is that it can be modified easily, if originally done correctly.
Does the lady bird deed need to be filed before death or can I have one prepared and put into safe keeping to be filed upon death?
Depends on jurisdiction. Deeds typically to be okay, need to be “delivered” and there could be an argument that it was not delivered. If it is not likely to involved a family dispute then you could do. We do not suggest “unrecorded” deeds. The ladybird deeds big advantage is recording it and you can change it later if you change your mind.
If my husband and I get a ladybird deed for our home and all of our banking and/or retirement accounts have assigned beneficiaries would probate of our estate be required or would all of our possessions pass to our beneficiaries without issue? Also I question if all home contents (furniture, etc.) are included in the ladybird deed…
I am not sure if you are in Michigan or in another State, but generally lady bird deeds are that “deeds”. They would only deal with real estate. You might consider a holographic will for your personal property, if you are leaving it to someone other than your natural heirs equally.
Also, your financial questions imply that you may be a candidate for a more sophisticated estate plan, such as a trust. There are other reasons for a trust that are not related to probate avoidance.
If we can assist you further, please let us know.
My mother and stepfather own a home in MI, the LBD lists me as the beneficiary, after they both pass away. My stepfather died and now my mom owns the property, we have never changed the deed. When she passes away will there be a problem with me obtaining title since his name is still on the deed? Or is this just the common succession of a LBD? Thank you.
If you are listed as the beneficiary on a lady ‘ladybird” deed in the state of Michigan, the property passes to you automatically upon the death of the original owner or owners of the real estate. In this case, once your step-father and mother have both passed away, if they own the real estate it at the time of the death of the second of them, all you will have to do is record an original death certificate for both of them with the register of deeds in the county where the property is found. In recording the death certificates, there is a record that you are now the legal owner of the real estate by virtue of the “ladybird” deed. – Susan Williamson
Thanks for all your help with this topic. Could I list the beneficiary of the LBD as ” Personal Representative” instead of a person’s name? We are thinking the home could be used in lieu of the Personal Representative fee. We currently reside in MI but considering FL.
My mother passed away in 2014 without a will ( she had one by no one could find it and the attorney had passed). My brother and I were two living children. I had a home so I signed a warranty deed so he could get the home in his name.
I recently found out he had died and his has a wife and child. Who does get the property? Do I have any rights to any of this home or my mothers things in this house?
I only have one child and would like to make sure she gets my house when I pass. I am in my 50’s and if at some point I would like to downsize or move elsewhere, would the Lady Bird Deed hinder any future decisions I make? I assume the LBD only comes into effect once I pass but I want to make sure.
my husband and I own our house outright. his parents are trying to get us a ladybird deed to leave it to them if we both die. we are in Michigan. my questions are…does a ladybird prevent us from getting a home equity without his parents? does this mean we are life tenants to our home? we are 35 yrs old without children is this a proper method to have them avoid probate upon our death? how difficult is it to reverse/remove a ladybird deed? and finally in Michigan does a ladybird deed supersede a will?
thank you so much in advance
Wow, lots of interesting questions. First, a LBD does not transfer ownership till death, so you can do whatever you want with the real estate while you retain ownership. Second, if done properly you are life estate tenants retaining the right to sever the life estate to do what you want with this real estate. Third, it can be a proper way to convey, but you seem young to have parents concerned about that. Finally, the LBD is not a “Will substitute” as a Will does many more things than just transfer real estate.
This is a great discussion with lots of interesting twists and turns. My parents set up a Lady Bird for me to pass along their home. My father recently passed away and I learned the deed for their home did not include rights of survivorship. My mom is now the sole home owner. I believe my Lady Bird deed would now be ineffective since one of the grantors is gone and title to the house has changed. Any thoughts?
I would have to see the deed. The language you indicate may or may not make a difference. Sorry to hear about your Father’s recent passing. If you are in the Great Lakes Bay area, we would be happy to meet with you.
I enjoyed reading your answers. Very interesting is the Lady Bird Johnson deed legal in all 50 states? If not is it legal in Florida?
Yes too my knowledge. We can refer you to a Florida attorney to answer your question if you like.
Hi, great article. Thank you. I have one question. Can a remainder beneficiary live outside of the United States. I’m leaving the property to my 16 year-old Daughter and as a backup I wanted to state my sister who lives in Ontario, Canada. Thanks again.
Yes.
My Mother in Law had a lbd naming her children as remaindermen with her husband having a life estate. Now he has dementia and has been moved to assisted living, his son (power of atty) would like to sign off on the life estate so that her children can sell the house. How do we go about getting that done legally?
See an attorney.
Can be issues for long term care planning.
A married couple owns their principle home in Michigan as tenants by the entireties. They create a Joint Revocable Trust in which they jointly are the sole Trustees, with power individually to amend, revoke, and distribute assets during their lifetimes. Upon the death of both, the Successor Trustee is directed to distribute Trust Assets among a number of named beneficiaries.
If they setup a LBD for the home, with the Trust as the default beneficiary, my understanding is that generally the following are true — can you confirm?
1) Using the LBD to pass the assets to the trust allows the home to remain under the homestead bankruptcy exception while both spouses are alive, with respect to claims by creditors against a single spouse.
2) The LBD does not affect the ability for the couple (and for the surviving spouse when the first spouse dies) to sell or refinance the home during their lifetimes.
3) The LBD does not impact the automatic passage of ownership of the home to the surviving spouse upon the first spouse’s death.
4) Determination of the step-up basis of the home upon the first spouse’s death is not impacted by the existence of the LBD (i.e. it is the same as it would be if the LBD were not put in place).
5) Creating the LBD does not trigger “uncapping” of the Michigan property tax assessed value.
6) It is not required that the lenders for any mortgages against the home approve or be notified before creating the LBD
7) The LBD does not subject the value of the home to any gift taxes.
Thanks!
1) That is my understanding.
2) True.
3) True.
4) Yes, but depending on current tax plans put forth by Biden administration this could change.
5) True.
6) True.
7) True.
Hope this helps.
A married couple owns their principle home in Michigan as tenants by the entireties. They create a Joint Revocable Trust in which they jointly are the sole Trustees, with power individually to amend, revoke, and distribute assets during their lifetimes. Upon the death of both, the Successor Trustee is directed to distribute Trust Assets among a number of named beneficiaries.
If they setup a LBD for the home, with the Trust as the default beneficiary, my understanding is that generally the following are true — can you confirm?
1) Using the LBD to pass the assets to the trust allows the home to remain under the homestead bankruptcy exception while both spouses are alive, with respect to claims by creditors against a single spouse.
2) The LBD does not affect the ability for the couple (and for the surviving spouse when the first spouse dies) to sell or refinance the home during their lifetimes.
3) The LBD does not impact the automatic passage of ownership of the home to the surviving spouse upon the first spouse’s death.
4) Determination of the step-up basis of the home upon the first spouse’s death is not impacted by the existence of the LBD (i.e. it is the same as it would be if the LBD were not put in place).
5) Creating the LBD does not trigger “uncapping” of the Michigan property tax assessed value.
6) It is not required that the lenders for any mortgages against the home approve or be notified before creating the LBD
7) The LBD does not subject the value of the home to any gift taxes.
Thanks!
I live in Bay City and own a home I live in as well as a rental home nearby. Could two separate Lady Bird Deeds be fashioned to 1) transfer my primary residence to my 4 adult children in equal parts and 2) transfer the rental home to one of my daughters?
Thanks,
Jery
Yes to both.
Can a person with a Durable Power of Attorney, sell a real estate(apartment), without a Lady Bird Deed?
Generally yes, however, the document is very important to be reviewed and the fiduciary has an obligation to the ward or person giving the power of attorney to do what is in their bests interest.
I have a Lady Bird Deed on my property in North Carolina. After the Lady Bird Deed was effected, my two children’s name was added to my Deed. I am in the process of refinancing my home for a lower interest rate as a veteran. Because the Lady Bird deed action required that my 2 children’s names be listed on the property deed, the lender required that the children sign all the refinance loan papers. The lawyer who did the Lady Bird Deed for me says that the children should not be required to sign the loan papers–he says that many, if not most people, do not understand the requirements in this case. Who is right?
Lawyer.
I am a Michigan resident. My home is mortgage free. I have two children, one currently on Medicaid. I have no long term health insurance so it is possible I will need Medicaid for long term care in the future. I am considering a Lady Bird Deed with both of my children as beneficiaries . How will this affect my child who is receiving Medicaid benefits?
We would have to know more about your situation and your child’s situation. We cannot tell from this email what governmental benefits he/or she has or might later qualify for. Please call one of our offices to set up a consult.
My wife was ladybird deeded her family home. The deed states “the house and all of it’s interests”. Does the word interest refer to the furniture and other household items within the home? (Michigan resident)
I think “interest” is vague and ripe for litigation. Deeds are not generally good Will substitutes. Wills are inexpensive to do and there are tricky issues with personal property. Hire an attorney.
If current laws should change (Texas), would the recorded deed remain valid?
Each State is different, but mostly likely not.
I have set up a ladybird deed with my 1 son only. I have 2 other children currently living with me in my home. When I pass, will my 1 son on the deed have any issues notifying the 2 living in the house, they must leave when house sells? If so, what can be done to remedy this issue? Thanks for any advice you are able to offer.
The two children residing with you have certain rights. They are likely holdover tenants, which means they would have to be evicted if they would not leave the premise.
My mother had a Lady Bird Deed made naming my sister and myself on the deed with her. We all live in North Carolina and the home is in North Carolina. She was in a nursing home and she died in January of this year. My sister and I have sold the house. Can we claim the step up when we file our taxes for this year? I was told that we have not had the Lady Bird Deed that long and could not claim it. Are they wrong?
Length of time on the deed should not matter.
Hi, Darrell, I love your site, there is so much great information here.
My parents had a falling out with my brother after he defaulted on a loan to them some years ago. My parents agreed that since I had taken care of them and their affairs the rest of their estate would go to me. After my mothers death, my father put the house into a Lady Bird deed with me as the beneficiary. I was concerned that some how my brother would come back and try and take the house, so we had a deed of trust with an underlying obligation to transfer the property at death to me.
Since that time, my brother has come back and convinced my father to change the Lady Bird deed to name him as a Grantee.
Will the Deed of trust prevent my brother from taking 50% ownership in the home after my fathers death? I’d like to avoid legal fights if possible, but I know it is coming and I want to be prepared.
Do not use deeds of trust. If the LBD was changed, could be basis for undue influence legal action to be taken.
What happens if there is a mortgage on the house when the owner passes? Are the beneficiaries required to pay if they keep the home? Or if they sell the home the mortgage will have to be paid for clear title? Thanks
Yes….and Yes.
Good afternoon, my father recently passed away, I’m an only child and I did not think he had any kind of estate planning or Will in place. Last week my family and I started cleaning out his house and going through some paperwork he had in his file cabinet. We found a Will leaving me everything but it done in 2012 and then we found a LBD that was done last year. My question to you is, is the LBD still valid if he never recorded it himself or can I now take the LBD to my county and have it recorded and show them my fathers death cert? Both the Will and LBD were notarized. Thanks for you help.
Can record deed.
My mother has a revocable trust and a LBD for her home. A grandchild and her family are living in the home. My mother is currently in assisted living and is not (yet) receiving medicaid. The grandchild and her husband would like to purchase the home with a land contract. Under this arrangement, would my mother’s home still be protected from probate and any future Medicaid recovery until the purchase is completed?
It would not likely be protected from Medicaid, as you took a non-countable asset (her home) and converted it to a countable asset (cash).
Can joint tenants with survivorship do a ladybird deed to a third person?
Yes.
My Mother in Law had an LBD naming her children as remaindermen with her husband having a life estate. he has dementia and has been moved to assisted living, his son (power of Atty) would like to sign off on the life estate so that her children can sell the house
You need to seek legal advice. If not done correctly, the husband may not qualify for Medicaid in the future. Not enough information provided at this time.
My husband and I are in the process of applying for
Heloc. Do we have to do anything with our Ladybird
deed to obtain the Heloc and if so is it a wise thing to do.
We have no mortgage and want to take out the Heloc to
purchase another home then repay the heloc when we sell our existing home. The reason we want to sell is to take the equity out of our home and buy a condo at a lower price than our house. Our attorney just retired and we are talking with his legal assistant and not sure if she is telling us the correct things. She said the bank will need a deed but not the ladybird deed.
For Michigan, you do not need to anything with the home equity loan. I think your being given wrong advice, but some Lenders do not like LBD. If in the Great Lakes Bay area call us. Thanks.
I own a FL property which is divided into 3 separate dwellings, occupied by two individual tenants and my self. one unit soon to possibly be a vacation rental. I have a small mortgage, very small home equity loan outstanding and two very small disaster loans. What is the best way to leave the property to my only son on my demise. LBD or simple will?
Both are probably best. I would contact Renee Nesbitt in Naples.
Hello,
I’m writing for your thoughts please. My great aunt is considering doing a ladybird deed naming my husband and me as beneficiaries for her home. She may have some early dementia and end up needing nursing care living in a few years. Her home is really her only asset and she has very little savings and receives only a little social sec. If my great aunt ends up going into a nursing home, would her home go to us or be taken for repayment by the state? We are all in Michigan. I read something about a 5 year rule for making deeds causing problems with benefits for nursing home living. Would doing this ladybird deed to my husband and me be safe/ok with 5 year problem or create trouble? Thank you.
Normally the use of a LBD, at least at this time in dealing with the qualifications for Medicaid, would protect your Great Aunt’s residence. It must be done correctly though. I would strongly urge you to use an attorney that handles elder law issues. If we can assist please contact Susan Williamson in Frankenmuth office.
Good article on LBDs. My parents in MI age 88 have a reverse mortgage which is charging 1k/month fees back to the loan. My parents have no other assets and require monthly assistance from me for taxes and living expenses. I would like to purchase the property outright with a life lease for my parents as I enjoy use of the lake 3 months of the yr..or wonder if we should use a LBD to avoid upcoming Medicaid issues? I would need/want to pay off the mortgage either way due to ongoing fees. I am concerned because my mom has beginning dementia and will likely need care in a yr or so and my father may want to eventually leave the home as well. While I can afford to pay off the 200k mortgage, I’m concerned about FMV if I purchase now, protecting both parent’s ability to qualify for Medicaid when needed, along with my ongoing investment in the property. This is complicated by their neighbor who is offering to buy the easement for 50k if the reverse mortgage company is willing to release it from the loan. I think this is a mistake for many reasons but overall my parents needs are primary. The house will have little value without the easement.
While I definitely need a lawyer to go either way – I am hoping for any thoughts on purchase under FMV vs LBD direction. I trust my parents not to sell if we went with the LBD, I’d feel better with some ownership as long as it didn’t impact Medicaid. TY – I live in FL.
I would suggest you contact Attorney Renee Nesbitt in Naples, Florida.
Yes.
Hi Darrell, will it look suspicious to Medicaid (would they care) if we sign a Lady Bird Deed 1 month prior to putting my dad in a nursing home? I have POA.
He does not have Medicaid yet, but may in the next month.
If you cannot share insight on this, I’d be grateful if you can provide any value. Thank you.
Sorry this went to spam.
Convey if not done yet.
My father died two months ago. He had a ladybird deed with me getting it. I plan on quick claim deeding to my daughter and her husband. Would i have to file a gift tax form if the cost of the house did not go up since i got it two months ago. Or is the cost basis when my dad bought it new. if they sell in three years what is there cost basis? Thanks
Lots of tax issues here. Would strongly urge discussion with your CPA.
Generally, the cost basis is what the value was at the time that your Father died. Sorry for your loss. If you gift, then their cost basis is the same as yours, unless it becomes their residence.
Nice article Darrell, and nice to see you still giving responses 5 years later. Anyway my question is simply, my father in-law has minimal assets outside of his home, but wishes for it to be left to his 4 children, 3 are biological 1 is not. In order to avoid probate and include the non-bio child, we thought about setting up a lady bird deed, and having the beneficiary as a living trust, so that the trust can direct the sale of the home and the split of the assets equally. Is that a reasonable approach? We are here in Michigan.
Sorry so late in responding, as our system was not working.
Very reasonable approach.
We had a LBD for my father who passed 10/7/20, giving to his three children, of which I am one. His house sold January ’21. For various reasons, I have not settled his estate, nor disbursed the proceeds. His will indicates he wants the proceeds of the sale to go to his nine grandchildren. The proceeds are around $65K. Since I am the executor and live in the town where the property is, my siblings signed POAs and the tax form indicates I have 100% of the proceeds (the plan was for me to disburse at a later date–I had planned to do it by the end of the year, but wound up in a legal separation from my husband, that through me for a loop, emotionally, and shut my brain down re: the estate).
Anyway, here I am into another tax year and now needing to file personal final tax returns for 2021 with my now soon to be separated ex…and I am worried about tax implications and inheritance tax. Do I need to worry? Should I be doing anything or can I do anything to avoid paying large taxes? I definitely don’t want to do that, nor do I want my siblings upset with me! They have asked me way too many times, when their money is coming. I feel terrible, but I am also disabled, in a wheelchair from surgeries gone bad and chronic pain. Just need a break!
I have not even filed tax returns on the estate because my dad only made 24K or so /year from SS. He had no other assets to speak of. We do live in Southwest Michigan.
Sorry this took so long to respond. Our system was down for awhile.
There is no inheritance tax in Michigan for this. As for the sale, If sold for what it was worth on October 7, 2020, probably no income tax issues. You still need to file a tax return though.
I can refer you to someone in Kalamazoo if that is close to where you live.
If someone is listed on the title of a property with an active mortgage and the deed states that it’s a quitclaim deed with joint tenancy and rights of survivorship, what are the legal consequences w/r/t the mortgage if the title holder on the mortgage passes away? The surviving title holder is not on the mortgage loan. Is the surviving owner legally entitled to assume the mortgage at the existing rate? I live in Michigan.
No, the surviving owner would either have to refinance or work something out with the current Lender. By transferring real estate without the permission of the Lender, you have likely violated a mortgage provision known as the “due on sale” clause. This allows the Lender to call in the loan when transferred without their permission. Most Lenders do nothing as long as they are getting paid. But after death, they can become less generous.
I am on ssi can I please put on the home I share with someone as part owner will I lose my benefits
I would have to know more, but you can own a parce4l or real estate and deed correctly, it would likely not violated any governmental rules.
Hi, I am doing a program called youth and government (YIG), and I have to argue about the Lady Bird Deed. Is the state of Tennessee currently having a bill with the Lady Bird Deed appealing for ratification or does it already exist? If not, could you explain why Tennessee has chosen not to implement it or stronger negatives about the deed?
Thanks for your help,
Roh Kil
Cannot tell you about Tennessee law.
in a Lady Bird agreement, does the life tenant have to pay the mortgage to have total control of the property while she still lives on the property? My Mother is the life tenant, and I (her) son is the default beneficiary. However, I (default Beneficiary) am paying the mortgage and have paid since 2013, there is still a balance and I still make the payments. Does My mother the life-tenant still have total control of the property, or does she have to consult with the default beneficiary before she can grant permission for someone else to move or to live on the property or rent, or sell?
First, a life estate tenant is supposed to pay taxes, insurance and maintenance, as a general rule. Without seeing the deed, normally the life tenant, assuming she has total control under the conveyance language, can do what she wants with the property. Your right is not vested until her death.
convey on death (enchanced le, lady bird, ect) deed history on my property details mean what? is it a lady bird or not i am being told no.
Would have to see the “exact” language.
We are dealing with a Michigan property that has an LBD and the owner is still living. The three remaindermen are two children and one unrelated individual, as tenants-in-common in equal share. The unrelated individual may not want to keep the property, while the two children do wish to keep it.
Can we avoid a partial uncapping of property tax by having the unrelated individual disclaim their inheritance of the property after the owner’s death, or does the LBD need to be revised to remove the unrelated individual while the owner is still alive ?
I would take care of it before the individual passes.
Hello,
My Grandmother had a lady bird deed and did execute it in the court system. She left it to my Father upon her death. Unfortunately, her DPOA decided to deed it to himself along with another property. She never signed the trust he created nor did she sign the quit claim deeds. Do you think there is a possibility my dad still has claim to the property?
Yes. Would encourage him to seek counsel as to possibility of a challenge to deed. Person with a DPOA is a fiduciary and has to consider the estate plan of the Decedent before acting and must be careful about acting in their best interest.
Is is possible to do a lady bird deed with and existing mortgage? If so, how is the remaining mortgage amount typically handled in Michigan? Example- lady bird deed transfer; parents to child(ren), property value $320,000, remaining mortgage $50,000.
Yes. The mortgage is a lien on encumbers the property. Lender could call mortgage in after the death of the owner.
My brother and I are grantees in our parents Lady Bird deed. Our parents are still alive and live in the house. I want to sell my interest in the lady bird deed to my brother. If I do, will I have to pay capital gains tax on the entire amount I receive from him?
You have no interest in the real estate at this time, so there could be significant income tax consequences. A lady bird deed does not convey ownership until death. So, your brother is purchasing from you a contingent remainder. I would consult tax professional.
I recently found out that my grandfather passing he left his land and all four of his grandchildren and won his or two his Grant two of his daughters and I was wondering how I was my mother able to sell mine and my brother and sisters part of the land actually she sold 40 acres or 30 Acres of the 40 that Grandpa left us I was just wondering how she was able to get away with that without her signature and what I can do about it
I would have to see the deed to really understand this situation. Sounds a little more complicated. If you were a minor, then Court would have to be involved in any sale.
My 2 sisters and I inherited our parents house at the end of 2020 when my mother passed (father died 20 years prior) which has a lady bird clause for the 3 of us to inherit the house. One sister has been living in it (free) with her husband for the last several years. She is now not in good health and is thinking that if she passed, she wants her husband to have her “share” of the house.
1) Would he automatically get her 3rd of the house upon her passing?
2) if she wanted to ensure he received her 3rd, can she have to “will” it to him?
3) My other sister and I do not want him to have any part of this house. If she can will it to him, how, can we block this?
Thank you for your help.
Sorry we missed this. If you still need assistance, please call.
My sister’s house was recorded as an Enhanced Life Estate (Lady Bird Deed), so when she passed, and the deed passed to me, I sold the house for less than the appraised value. From reading information, I realize that it is sold as a step up basis; however, my question is – do the total sale proceeds add to my overall income for tax purposes. If so, I will encounter a huge tax bill.
Not likely. You may be be able to write off loss.
Sorry for not responding earlier, as this went into our spam folder. Corrections made. Again, my apologizes.
I am curious how the LBD works for a spouse whose name is not on the house in MI. There is no mortgage on the house and we are considering a LBD to leave the home to our daughter. Do we need to put my name on deed first (avoided so far due to creditor issues) or put both of our names on the LBD?
A little more complicated. I would want to know more about creditors and how much. You can always be given a life estate in the home, but not be an actual owner.
Is there a certain amount of time that needs to pass between obtaining LB deed and going into the nursing home for them not to be able to take property?
Generally, no. In fact, normally the LBD does not even have to be recorded.
Where is the beneficiary named on a LBD if husband and wife are both Grantors and Grantees? Home is paid off and located in MI.
The remainder person on a LBD is on the document itself. What you have may not be a LBD. If you are in the Great Lakes Bay area, you may want to contact us.
Hi Darrel,i am a single man with 1 daughter&no debt.All my moneys have her as sole beneficiary now,have no will or trust set up,so am planning on doing ladybird deed on home&property to make it easy on her.Sound good to you?Please email answer if would.Thanks
Sorry, you have provided a nice summary, but there could many other factors. If the daughter is a minor, that can be an issue. Happy to assist if in Michigan.
Thank you for such a great article. I already have a Revocable Trust that flows into a Family Trust upon my death. I am purchasing a house. When I die I would like both sons to inherit the house equally. Would there be any benefit in putting the house into a Lady Bird Deed naming my two sons equally (knowing that one son will potentially buy out the other son’s interest and keep the house) instead of into my Exempt Family Trust, which is irrevocable and held for the health, education, maintenance and support of my children and their descendants? (If I did it this way would one son be able to transfer the house out of the Family Trust into his name if he chooses to keep it?) Thanks!
Sorry this went into spam folder. Have made corrections so does not continue to happen.
If you still need answered and you are in the State of Michigan, please email us.
If grandma has LBD leaving home to her granddaughter, she has no life insurance, on Medicaid with no money for funeral expenses when she dies. Can these expenses be paid from estate or does LBD make it impossible? Can there be clauses added for those expenses to be paid from estate regardless of LBD?
In general, a LBD avoids Probate Court and the claims/expenses associated. If there was some oral agreement that the real estate would be conveyed to someone with their agreement to pay the funeral bill, then that could change things. Otherwise, the personal property in the residence could be sold, along with any vehicle, to pay towards the funeral bill. Otherwise, the State of Michigan may pay something if person passing had no money. LBD can be modified, if a true LBD, to provide that payment of the funeral expenses are a condition of receiving ownership.
I am currently selling property i got from my dad through a LBD. I know he wanted the proceeds split up. If I give $80,000 to my brother and my sister, is it considered a gift. Way over the gift limit. I don’t want any tax problems
See CPA advice. The size of your financial estate really is what matters.
First off I am beyond glad stumbling upon this thread and love how you answer everyone. I was LBD my grandparents house in 2012. My grandpa passed in 2019 and the will was never filled. My grandmother just recently passed. I went with both death certificates and copy of LBD to transfer all to find out her POA switched the property to his and his brothers names 4 days before she passed. She was on hospice at the time and not coherent. Would this be something I could fight. Her POA signed the documents himself as her attorney in fact and purchased for $1.00.
My initial opinion is yes. In Michigan, there is a presumption of undue influence if the person acting under the DPOA benefitted. If you are in Michigan, please feel free to contact our Firm and if we cannot handle, we will direct you to someone.
Have a great Christmas!
I am in Michigan and I actually have an appointment in your office on Jan 6th! Hope to see you then. Merry Christmas
See you then. Have a great holiday! Be sure to bring all documents with you that you believe are pertinent.
I Own my home in Florida. If all my
monies have listed beneficiaries and
the ONLY other thing of value is my
home, will a lady bird deed suffice
at my death or do I still need I will?
Under most circumstances a LBD will suffice, but there are other considerations….Medicaid, age of person receiving, capital gains. If in Florida, we use Renee Nesbitt who is in the Naples area. Reasonably priced and very good. Good luck.
in texas, does lady bird have to be filed with county. what is typical cost of lady bird. can you recommend an elder lawyer.
thanks
Please let us know if you still need assistance. We did not see the post you made till today. Apologize.
This is really a question I obtained ladybird deed, and was told you court and have my children submit it once I passed away with a death certificate would that be incorrect??
Not completely following, but I presume that you are asking that should you pass, would your children just file a death certificate. Generally yes, but would need to see deed to state with complete accuracy. Also, there are some other steps that needs to be done as to the Assessor.
Hello. My question is this- mom & stepdad on deed. No mortgage. Was mom’s home 13 years before meeting SD. Can mom file LBD with me as beneficiary? Or do they both need to sign/gave me listed?
SD getting ready to enter long term care due to dementia issues. We are in MI.
Thank you
Sorry for not responding more timely. This question is very much dependent on the language on the deed and the State you are in. If in Michigan as you stated, then could avoid probate court and still qualify for Medicaid, but definitely should consult with Elder Law attorney familiar with Medicaid planning. Worth the consultation fee!
If one one child on LBD and not the second child -do contents within the home go to child on LBD if there is no will or other legal documents?
Unlikely. Contents are personal property and at least in Michigan, the children of a deceased parent receive an exempt property allowance. This allowance would be in the amount of $17,000.00 total in the year 2023. Means that if there are two children, they each get $8,500.00 in personal property or cash.
There are other ways to deal with situation, but would require specific legal advice tailored to the situation.
Hello, my sisters and I are named on my dads lady bird deed(Michigan). He is in long term care, on medicaid (never going home) There are still bills that need to be paid and a lot of work to be done on his home. Can we sell his home? And how would that work? (unable to find any information on this)Thank you so much
In in Michigan, we can assist. You need to be careful, because in most States the selling of the home voids the protections afforded the individuals residence. Please contact us if we can assist further.
Should the contents of the home be in the LAD ?
Generally contents are personal property, which a deed can sometimes be viewed as a “will substitute”, but if you are doing that, you would be advised to seek legal counsel.
if I am sole bennificary ,and
only person on a lady bird deed, signed,
and recorded, and the grantor, goes into
long term care, terminal illness,
DO I OWN THE PROPERTY OUT RIGHT?
Unfortunately we cannot give direct legal advice on this blog. Typically on a lady bird deed you have no interest in the real estate until individual dies. If you are in Michigan and need assistance, please contact one of our locations.
Hello,
I had a Question?
If my mom had Dementia during the signing of a lady bird deed or deed to her land and it was originally split up between us siters and now one sister is trying to keep it all becaude of the Lady bird deed,being signed knowing my mom had demintia and was not in her right mind can i take to her court? to get my property back that was originally mine that was from my mom?
Possibly.
so i would have do this before i go to nursing home i have 3 kids i can name all of them please explain they haave to pay property taxes
Not necessarily. Need more information.
Father in law wants to know if he gets a Lady bird deed that his property goes to his son, can said son get a construction loan to build on site with FIL consent? Texas.
In Michigan, the answer would be no.
If a mother passes away and her Will disinherits 3 of 4 sons and leave every single thing to 1 son, but the current deed on file lists all 4 as tenants in common because she passed away before finishing filing the Lady Bird, which is followed? What happens if the unfiled Lady Bird cannot be located?
Wow? Lots of what ifs!
The Will does not trump a deed in most States. If the unfiled LBD is recordable, it can be recorded after death. If the unfiled LBD cannot be found, that is difficult to say what the result would be. Some argument can be made that a deed can be a Will substitute and a copy might be admissible to the Probate Court as such. However, that is probably pushing the legal possibilities on this. Worth consult with an attorney.
My sister’s husband is trying to remove her from their house deed without her permission. They have been married for 50 years, and he wants to remove her from the deed and replace her with his two sons. Can this be legally done without her consent?
This appears much more involved then your question. For instance, is she competent? Are they planning due to some Medicaid issue or long term care planning? Does she owe a great deal of money to someone?
If you are in the Great Lakes Bay area, we could assist.
Mom passed in 2022 – ladybird deed to 3 siblings as co-owners. Siblings agreed to let 1 sibling, me – purchase the home and give them each money to pay them off and they would walk away from house and all it’s contents. We have this is writing in emails and verbal. went well with one sister, paid her 65k – the other sister demanded 10 grand more – gave it to her – now she is taking me to court for conversion – for contents of house. My attorney says our email agreements, in writing – and verbal between the 3 siblings won’t hold up in court, so now my moms house is just sitting with all of mom’s things for over a year now. I feel my attorney is wrong – people make written and verbal agreements all the time – so how would this be different? Also sibling took the 75k, and wedding rings, and finally sent QCD – but the county wont record it because she refuses to pay taxes she owes on it. She says it’s my responsibility. Should I consult another attorney? This sibling hasn’t been in MI in decades, I never took anything of moms and SHE is taking me to civil court in front of a jury becuase the judge doesn’t like her “boyfriend” attorney, and my atty has now charged me 25 k and hasn’t even gotten the QCD settled in over a year – court isn’t for another year – deseperate for advice. And how can I be responsible for taxes when I paid them both? I have been the only sibling since moms death to pay for the house (paid off in full) the taxes, utilities, everything – they never paid a single dime even as owners. Help? Desperate in Michigan
I would consider another opinion. You can email me at dzolton@zoltonlaw.com.
Can refer you to someone if we cannot handle.
Hello,
I have a question? My husband and I put our life savings into our home which was on the family farm which we found out his brother owned so the piece of property that we built our house on. We found out it was owned by his brother he took her name off the deed told us we had to do that for the mortgage which was a lie. Now we have a $600,000 in this house and they want to kick us out can they do that?
This is very confusing. If this is in Michigan and in the Great Lakes Bay area, we could meet with you. If it is not in Michigan or around our office locations, I would strongly urge you to seek legal counsel. It sounds like a fraudulent matter may have occurred, but I do not possess sufficient amount of information to fully have an opinion. There are legal arguments for equitable mortgages or constructive liens that could be applicable.
Do counties actually record Lady Bird Deeds as Lady Bird Deeds or do they use a different description on the public record? (Can the public actually see LBD as a description in the record?)
Record.
How do counties actually record a LBD on the record? Do they use the actual words Lady Bird Deed?
No. There are many types of deeds. The legal term for a LBD is an enhanced life estate deed.
My brother passed suddenly he was given two weeks to live. He had cancer through out his entire body including brain. He couldn’t walk or talk. During the two week period his housekeeper said she had a Will and a Lady Bird Deed. On the day he died 4-17-23 she locked everything up wouldn’t let us see any paper work and is claiming everything! Do I and my last living brother have any recourse?
Yes. See legal counsel.
My mom has dementia and I am power of attorney (also in home care-taker). The lady bird deed has me as the beneficiary and then my sister the successor only in the case of my death (per the deed language). Am I able to name a different successor because I am untrusting of my sister’s financial competency with our mother’s property in the case of my death?
We cannot give you a full answer based on your statement of facts. Under Michigan law, if a fiduciary (someone who has a confidential financial relationship with another as defined under law) does something to benefit themselves or acts in appropriately, they can be liable to the principal or in this case your Mother. Without court intervention or approval of your actions, you might be putting yourself in jeopardy. I would suggest getting a more formal legal opinion.
If I am the sole owner of the property and want to list my two sons on the Lady Bird Deed as the remaindermen, and not my husband, is this a problem? The state of Florida says all property is automatically transferred to the living spouse even if his name is not on the Deed as an owner. I have been told as long as my husband also signs the Deed as “Grantor’s Spouse” there will not be a problem for the kids when I die. Are you able to confirm that is true and no other documentation from my husband will be necessary?
We are not licensed in Florida so can give you specific advice. Would suggest contacting Renee Nesbitt in Naples, Florida.
I have a longtime life friend that has placed a property in a ladybird deed for myself should anything happen to her. She has horses and knows that none of her family will care for them and doing this allows me to continue the care for her horses. This is in Florida…she is worried that her blood family could come for the property should they see this. Is this something to worry about if she has one of them as POA? Or has she set herself up to not have to stress over this?
We would suggest you contact Renee Nesbitt in Naples, Florida. There are definitely steps that need to be taken to carry out her wishes. Transfer of the real estate is no sufficient to accomplish what you describe.
We wish to leave a dollar amount to one child and split the remainder between our two other kids. Can that be stipulated in a LBD?
Yes. Would typically be a % of ownership, not dollar amount. Could put into a trust as another alternative through the LBD. Advise you speak with attorney.
What happens to the ladybird deed if the grantor survives the grantee? What happens to the Ladybird Deed? If there is a Living Will, does it play a role if there were designated beneficiaries for the property?
As a general rule in Michigan, the consensus appears to be that the if the Grantee dies without a change being made, AND, it is more than 120 hours after Grantor died, then it will go to the Grantees family. However, it will have to be probated. Living Will has nothing to do with the real estate.
I loved reading your article on “what should a woman ask for in a prenup“. It’s unfortunate that prenups are often seen as a taboo subject, but your article does a great job of breaking down the stigma and presenting prenups as a practical and necessary solution for protecting oneself. Thank you for writing on such an important topic.
Thank you for the kind words.
If I am the beneficiary of a lady bird deed can my mother sell the property? She was not a beneficiary but is allowed to live there until her passing
Yes, she retains control during her lifetime.
My father made a quit claim deed
and named one sister on the deed, she is also the executor of his estate. It was understood by the three sisters and my dad that this was to protect him for Medicare and possible future legal issues. Upon my dad’s death my sister, the executor, has informed my sister and I that she owns the property as dad created what she is now calling a lady bird deed (which has never been filed). My sister, the executor attempted to sell the home but the title company would not accept the deed. The executor sister, is requesting we sign off to the complete the sale. My sister and I said we would sign off if we received our 1/3 as dad stated in his will and trust for all property and possessions to be split equally. The executor sister is now going to court to have the property deemed hers. My question, is there any precedence for all three sisters to receive proceeds from the sale since the deed was never filed? What would be wrong with the deed for the title company not to accept it? Is there any chance the proceeds can be split as dad wished?
I would encourage you to retain legal counsel to review the pleadings. If this is in Michigan, deeds have requirements to record and if not recordable they may not be valid, but it could be argued to be a Will substitute. You have certain legal rights that are more than can be responded to in this type of blog.
Cottages can be quite the issue with family’s. As a tenant in common, you can do what you want with your share assuming there is no agreement between the owners. Your interest is severable, and the ownership is at risk of someone demanding a buy out (could result in a real estate partition action). LBD would work in most cases.
I have a client that has a ladybird deed with 3 of his brothers. The original owner has died. One of the brothers has been living in the home since the passing of the owner. He let the taxes go so the other 3 brothers paid for them to prevent foreclosure. The 3 brothers are now wanting to sell the home but need to kick the 1 brother out. How do you go about kicking the brother out of the home to sell it?
Would have to see the deed to see how titled. If owned as joint tenant or tenants in common under Michigan law, a real estate partition action would have to be started most likely. All owners would typically have a right to reside there. Is filed in the County where the property is located and usually is around $3,000 to $5,000 to handle.
My mother deeded me property in a ladybird deed in Texas but my stepfather is also listed in the deed as being left my mothers life estate. The property she deeded me is included in her life estate. Does the property go to me or m stepfather at her death?
I would suggest consulting with a licensed attorney in Texas. In Michigan, I would have to review the deed and the language contained thereon before providing any advice. A life estate would prevent you from taking possession unless the life estate tenant would sign off or their legal interest is bought.
My adopted mother made her biological son the grantee and excluded me and my brother her legally adopted sons in the deed. I feel like are inheritance is in question as when she passes it states only her biological son is the only one to receive the property and not us in Florida can I contest this.
I would suggest contacting a Florida attorney, as each State has different court rulings.
Hi Darrell, my parents own a single property with 2 houses on it, and they are looking at setting up an enhanced life estate deed for that property as part of their estate planning. They have zero interest in using one of the houses on the property, and they have communicated that I am free to live in and use the dwelling however I desire now and in the future. I’m interested in making improvements to the dwelling with an addition and renovation. They’re understanding of the fact that I want to protect my time and financial investment into that portion of the property. Because an enhanced life estate deed gives them the ability to revise the deed at any time before their passing, removing me or gifting, selling or even simply taking loans against the property, might it be best to execute a separate agreement between us to protect my interests or can it somehow be worked into the deed in such a way that I could at least be reimbursed for any improvements I make?
I was originally thinking we’d go down the path of a revocable trust for this property, with language requiring my sign off before such changes OR some way of at least reimbursing me for what I’ve sunk into it.
They are open to finding the best way to protect my interests in addition to their own, and as I see it a ELED wouldn’t provide me any protections because at any time I could be removed as one of the listed grantees (others being my siblings), and/or they could borrow against it, sell it or gift it. At this time they are reasonable about it, but with time and age, as well as potential influence from other grantees I see potential issues with the ELED for this arrangement.
Wow, this really requires more information and attorney time. There are issues related to Medicaid, liability and certainly how you are protected for inputs into the real estate. Well worth retaining attorney for a small fee to consult.
My mom just made me the grantee to get her hoe when she dies thru a lady bird deed in florida. im wondering what taxes will i be responsible to pay when i go to transfer the home with her death certificate and also when i sell the house
Hard to say for sure on taxes, as each State if different. You could contact Renee Nesbitt in Naples, Florida for a consultation. Likely no income taxes.
Nice article.
I live in Texas and just had my house put under a lady Bird deed for my 2 children after an abstract of judgement was put on the property by an ex sister in law to whom I was asked by the courts to pay $50.000 USD to after she had judgement in her favor on a defamation law suit she filled against me. I now live in France and my 2 children whom the house was deeded to are in college away from home. Can I rent that house out to someone else since I don’t make enough in France to keep up with the mortgage payments for now until the kids are able to handle the finances of the property? Thank you!
You own it, you can rent it in Michigan. Not sure with Texas, but think would be similar.
Can an LBD be revoked after one of the Grantor’s passes away? Would her Will trump the LBD? And Can the remaining Grantor revoke the LBD on the bounds that he signed as the decedents Agent in Fact prior to her death and there was no DPOA filed with the County Clerk?
Lots of questions, which require much more information. Generally, a LBD can be revoked by the other owner, unless LBD states otherwise. Will does not generally matter. If it was the intention of the Decedent owner, then the revocation is self-serving for the DPOA from your facts I would suggest.
A friend wants to add his son and daughter on a LDB, the property that is all paid in cash, would they lose their first time home buying benifits ? They are planning to purchase homes in Florida this year obtaining mortgage. Would underwriters look at them that they already have a property!!
They own nothing till his death under most LBDs.
Hello,I have a qick question. I need to sign LadyBird deed for property located in Fl. I am the owner and granting rights to my sister. I came to NV where she lives, so we could both place signatures on deed. The question is: does LadyBird document need to be notarized at the state where the property is located(Florida), or can we sign it in NV? Thank you in advance! Appreciate your time.
I am not licensed in either State, but the signing location is not typically the issue. The issue is does the document comply with that State (where real property located) laws?
Can you put a property that has a “lady bird deed” into a trust?
In general yes, at least in Michigan.
My mom passed with a ladybird deed naming me her beneficiary in michigan. Can I keep the house in her name for a time period? Do I take her death certificate to Wayne cty register of deeds and then what?
You will need to notify at some point the local assessor, as your Mother can no longer use the principal residence exemption. If you get caught not notifying them, they could come after the lost revenue for the previous years I believe. You also should get insurance on it. The insurer will ask if it is your residence or not? Typically the issue is when the insurance renews.
Helpful article. I want to make sure I’m understanding. My dad had a Ladybird Deed on his original home, but sold that and now lives in a modular home park close to me. He paid cash for this home and my name is on the deed with him. My name is also on his bank accounts. I was told that my name on his deed and his accounts would be sufficient to avoid probate in case of death, but what if he requires assisted living? Is it enough to have my name on the deed and his accounts?
This inquiry exceeds the general information provided on our Blog. You should seek legal advice. In Michigan, if you are on the assets at a joint owner, it may or may not matter if your Father goes into long term care. Bank account joint ownership will not prevent the entire amount having to be used for his care normally.
Can you use a Lady Bird deed if the property has co-owners (siblings)?
Depends on the exact language on the deed. Lady bird deeds or enhanced life estate deeds often times name multiple remainder persons.
My father-in-law passed away a few weeks ago. My wife has a LBD that was filed a year ago naming her on the deed. She also has executor of estate paperwork, a generic will, and power of attorney. He suffered a major heart attack at the beginning of December and had a girlfriend living with him whom he has only known for 2 months. As soon as he was well enough to walk around she convinced him to go to the post office and get married. 13 days later he died. Does she have dower rights to the property? We do not plan on selling it as my father-in-law wanted my brother-in-law to continue living there (he has lived there for 3 years and been paying for everything) This is in Florida.
No dower in Michigan any longer. You may want to contact a Florida attorney to confirm if there is dower there. There is none in Michigan any longer.
Thank you for this helpful article lady bird deeds. A husband and wife own a principal home, jointly owned, and a vacation home, owned by the husband, in Michigan and both also have 401Ks. Can the couple file lady bird deeds, naming one daughter for the jointly owned principal home and the other daughter for the vacation home? Would this violate the spouse’s right to $150,000 and half the property? Much thanks!
Wow, a great in this question. A LBD passes outside Probate Court and the applicable laws applying to how much each party receives. The issue on the vacation home is more related to long term care issues, as it may not be protected in Michigan, depending on how it is owned. Lots going on here, you would be well advised to get legal assistance.
Darrel , my mom has a lady bird deed for the house she owns and live in my name in Florida, She does however lives and is resident in Brazil, What taxes will be due upon her pass to me? And do I need to do anything when she pass or just wait?
I would ask an accountant, but I do not believe there will be any capital gains. Could be some State inheritance taxes. We can direct you to an estate planning attorney in Florida if you wish.
Wow, you’ve given excellent explanations. In MI if a husband & wife have little assets except for a home, and they have only one adult child, the home has no liens, do they create the LBD as Grantor(s) Joint Tenants with Full Rights of Survivorship and Grantee(s) or how do they name their child as beneficiary once both die?
There are reasons for picking the type of ownership depending on each family situation. This inquiry would require more information from you. Further, I cannot give specific legal advice, only general information. You should seek legal counsel, as you are on the right track. If in the Great Lakes Bay area, we would be happy to assist.
I have a question.
My mom has been in a nursing home with Alzheimer’s for 2 years. She is on Medicaid.
She owns a 50 year old mobile home on several lots. Since the home has been vacant for 2 years it is starting to deteriate alot. I keep repairing things at my cost trying to keep it up. Currently one of the ceilings is falling in and I will spend 2,300.00 repairing it. I don’t want to keep pumping money into it if I will never be able to sell it in the future.
Is it to late to do a Ladybird deed in Texas? How does this affect her medicaid?
I would consult legal counsel in Texas. You might be able to put a lien on the residence and if sold, then you would get paid before Medicaid is reimbursed.
Your information was very informative and covered a lot of interesting info. Thank you for taking the time to share your expertise. I especially appreciate the questions you’ve answered. I’ve learned a lot.
My spouse and I have a Revocable Trust. We are in our late 60’s. We had not yet put our home in our Rev. Trust and were planning to do that next month. We live in Michigan and our home has no mortgage. A friend suggested we do an LBD for the home naming our Revocable Trust as beneficiary. We knew we didn’t want to do an LBD and list our children as beneficiaries, but had not considered the Revocable Trust.
It seems like most people put their home in their Revocable Trust. LBD’s seem to be somewhat discouraged when reading thru attorney opinions online.
I was just wondering if there was any obvious answer in a situation for someone in our age group to consider the LBD with Trust beneficiary OVER just transferring the Property to the Revocable Trust- since we have one.
One of our goals would be to keep our estate somewhat straightforward so we can easily keep up and understand it as we age and also for our Trustee to handle it at our death.
Are there any obvious pitfalls you’d advise someone to think about or questions to ask when preparing to talk to an attorney?
Thank you.
Barb
Barb, if you are in the Great Lakes Bay area, we would be happy to sit down with you.
We use to “fund” the trust directly, but that then required a call by our clients to their insurance agent to name a new insured. Further, under the Michigan law, there are protections for real estate when owned by a married couple, that does not exist if in a trust. Additionally, when selling you avoid the need to record a Certificate of Trust Existence and Authority or have another draft one for you. Finally, there can be advantages for Medicaid planning to keep it out of a trust OR put in the trust depending on your asset level.
As you can see thee is a great deal happening behind the scenes in the other attorney’s analysis. On most occasions, our Firm will do a LBD that transfers the remainder interest to a trust.
My mother currently has a ladybird feed on her house. She currently lives in a privately funded assisted living facility (payments are not through insurance). If she were to need to go to a nursing home, would her house still be protected if she didn’t physically live there prior to moving to a nursing home?
Most likely under Michigan law, but would have to see the deed.
Hello, thank you for your article.
My parents live in NC and last year placed my two sisters and me on a LBD to protect the home in the event of long-term nursing care is needed to protect the property from Medicare.
On this home, they have a long-standing Line of Credit Loan that they have been paying to the bank. This loan is due in April 2025, so they were looking to mortgage the home to pay the LOC off.
In doing a title search, the names of me and my sisters appear on the title and the bank will not setup a mortgage unless my parents re-title the property back into their name and then later do another LBD.
Is this typical or is it that their bank does not allow this while potentially other banks will? Thank you in advance.
Sorry for the tardiness in getting this too you. For some reason it flew under the radar.
Retitling for refinancing is common, but not with all banks or credit unions. You may want to look at other financing options.
For instance, could you finance for them and be paid the interest.
Can I complete the Michigan Lady Bird deed myself? I am leaving my home to my only child.
I need to answer the question and provide the information from the deed.
As a lawyer, I cannot tell you that you are capable of creating a legal document. While it is not surgery, I think if I asked a doctor if I can remove my own finger, they would not say yes, even though I could do so at great pain to myself. My gest is meant to impress that saving a few dollars may cost you in the end.
Hi,
Thanks for the insight on the article and with the comments on the individual question.
In texas, can the LB estate option be used to name two beneficiaries with unequal percentages, say 80/20%. And then specify one of them (the 20% beneficiary) as the remainder beneficiary? Both beneficiaries are siblings. Thank you.
Not sure about Texas. Need to contact Texas attorney.
If there are two owners listed as tenants in common on the property record, can one of them use a lady bird deed to transfer their portion (50%) of ownership upon death? Can they use it to transfer to the co-owner and/or can they use it to transfer to a beneficiary other than the co-owner?
Yes. Yes. Yes.
Hi,
My sister is the beneficiary of her boyfriend’s home using a Ladybird Deed. However, my sister passed 2 yrs before her boyfriend. He did not change the Ladybird Deed or sell the property. Would the house go to my sister’s heirs or her boyfriend’s?
Would have to see the deed, but normally title examiners consider the gift to your sister, which requires a probate administration.