Legal Question in Wills and Trusts in Michigan

Re: Will & Estates

You answer is very simple. Use a revocable living trust or a lady bird deed. This is a little known land title deed. Here is what it is.

These deeds are more accurately called "enhanced life estate deeds" but got their more colorful moniker (according to unsubstantiated legal lore) because President Johnson once used this type of deed to convey some land to Lady Bird.

"Life estate" is an ownership arrangement for land designed to accomplish two things: 1) it allows the homeowner to retain the use of the home during his/her lifetime, and 2) it transfers title to the home at the time of death without the need for probate.

In a regular life estate deed, the owner keeps the "life estate" and conveys a "remainder interest" to someone who will inherit the property. The current owner continues to occupy and use the property and is entitled to all money that may come from the property. However, the owner cannot sell the property without agreement of and participation by the holder of the remainder interest. Further, the IRS puts a value on the creation of the remainder interest, and if it is large enough there may be gift tax consequences.

A "Lady Bird" enhanced life estate deed adds one feature: the owner keeps the right to sell or give away the land without anyone�s consent or participation. Essentially, the owner has the unilateral right to cancel the remainder interest. As such, there is no taxable gift to be accounted for.

If the arrangements under the Lady Bird deed are not cancelled, then when the owner dies the life estate expires automatically. The remainder interest matures into full, unrestricted ownership. The ownership change happens without probate.

Re: Will & Estates

One way is by creating a Revocable Trust. You would create a Trust having you as the initial trustee and your children to be the beneficiaries once you pass. You need to talk to a lawyer.

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