What is a lady bird deed?

What is a lady bird deed?

A lady bird deed is an estate planning instrument that allows the grantor to direct the transfer of property on his death while maintaining control over the property during his life. This type of deed is governed by Michigan Land Title Standard 9.3, which states, “The holder of a life estate, coupled with an absolute power to dispose of the fee estate by inter vivos conveyance, can convey a fee simple estate during the lifetime of the holder. If the power is not exercised, the gift over becomes effective.”

This means that an owner of property can deed the property to herself and indicate on the deed that, if she does not otherwise convey the property to someone else during her lifetime, the property, upon her death, shall transfer to whomever she indicates on the deed. This ability to convey during the grantor’s lifetime is why the lady bird deed is also called an enhanced life estate. Regular life estates allow the holder only to use, not convey, the property.

The lady bird deed can thus allow a property owner to avoid probate upon death while maintaining control during life. As always, there are important legal implications to consider, so contact me if you have any questions about estate planning in general or the lady bird deed in particular.

The lady bird deed got its name, by the way, when President Lyndon B. Johnson deeded property to his wife, “Lady Bird” Johnson.

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