LA GRASSO | ABDO | SILVERI
Oakland and Macomb Ladybird Deeds Lawyer
What is a Lady Bird Deed?
A ladybird deed is a type of quit claim deed that, if done correctly, can keep real property out of probate court when the owner passes away. It is a creature of Michigan law and is sometimes referred to as an enhanced life estate deed.
A ladybird deed allows a property owner to remain the current owner of the property while naming a specific person, specific people, or a living trust as the owner of the property, effective upon the current owner’s death. The effect is much like designating a beneficiary of an IRA. The IRA account holder remains the owner of the IRA while he or she is alive, and the designated beneficiaries receive the IRA only when the account holder passes away. Similarly, with a ladybird deed, the real property subject to the ladybird deed remains in the original owner’s name while he or she is alive and transfers to the individuals or entities named in the ladybird deed only after the original owner’s death.
One important feature of the ladybird deed is that the owner is still able to sell, lease, mortgage, gift, or otherwise convey the property without the consent of the named beneficiaries.
A ladybird deed is a useful tool for every estate plan that involves real estate. Even if a person’s situation or desire does not warrant a full living trust, a ladybird deed is still recommended to keep real property out of probate court. When a person does not have a living trust, he or she can keep almost all his or her assets (e.g., bank accounts, mutual funds, IRAs, life insurance) out of probate court by naming a joint owner or beneficiary to those assets. But the only way to designate who is to receive real property after the owner’s death without making that person a current owner and without the need for probate court would be to use a ladybird deed.
Ladybird deeds must contain certain language to have the desired effect. While it may be tempting to save money and draft your ladybird deed on your own, the requirements are complex, and drafting it incorrectly may have catastrophic results. Call the office of La Grasso, Abdo & Silveri, PLLC today to have a ladybird drafted the right way for you.