Maintain property rights Allows you to maintain all your current property rights, so you can still sell and profit from the property during your lifetime.

A lady bird deed can be changed at any time without the permission of the heir/beneficiaries. Beneficiaries can only make decisions about the property after the original owner is deceased.

Protect the property by preventing a Medicaid Estate Recovery Claim U.S. federal law allows Michigan to claim a person’s assets (typically their home) after their death to recover Medicaid costs for long-term care. With the implementation of a lady bird deed, the property is no longer considered as part of your estate, and therefore, it is no longer subject to Michigan’s Medicaid estate recovery plan, so you can pass the property on to your loved ones.

Avoid probate Upon implementation of a lady bird deed, your property will no longer be considered part of your estate, meaning it is no longer subject to probate court proceedings.

Avoid Gift Tax A lady bird deed only transfers property upon the Grantor’s death, which allows you to avoid paying gift taxes and filing gift tax returns with the IRS.

Minimize capital gains taxes Gifting property to an heir can have large tax consequences for both parties. With a Lady Bird Deed, the beneficiaries get what is known as a step-up in basis to the value of the property at the time of the owner’s death, thereby significantly reducing potential capital gains taxes when the property is sold.

Keep property taxes low Implementing a Lady Bird Deed on your property will NOT cause the local taxing authority to un-cap your property taxes, allowing you to maintain the same tax basis.