New to estate planning? You’re in the right place. A living trust is a legal document that holds your family’s assets so they pass directly to your loved ones — no probate court, no delays, no public record. That’s the core idea.
If you’re just starting to figure this out, I’d suggest reading Having the Estate Planning Talk with Your Parents first — it walks through the whole picture and how to get the conversation started. Then come back here for the Michigan-specific rules.
Already know the basics? Keep scrolling — everything below is specific to Michigan.
You’re not alone in this. As someone who went through the estate planning process with my own aging parents, I know the weight of these conversations — the awkwardness, the guilt, the fear that you’re not doing enough or doing it too late. Take a breath. You’ve found the right place, and Michigan has a powerful estate planning tool that most families don’t know about.
Here’s the headline: Michigan is one of only five states that recognizes Lady Bird deeds — and it’s the state where they matter most. Why? Because Michigan does not allow Transfer-on-Death deeds for real property. In most other states, families can use a simple TOD deed to pass a house or cottage to the next generation without probate. Michigan doesn’t offer that option. But a Lady Bird deed does the same thing — and more.
A Lady Bird deed lets your parents keep full control of their home during their lifetime while naming a beneficiary who automatically inherits it at death, completely outside of probate. And here’s the part that makes Michigan special: the state limits Medicaid estate recovery to the probate estate only. Property that passes via Lady Bird deed isn’t part of the probate estate — so it’s generally protected from Medicaid recovery. That combination is rare and powerful.
Michigan also has no state estate tax, no inheritance tax, and no gift tax. Add in the new permanent $15 million federal estate tax exemption, and the vast majority of Michigan families face zero estate tax. But probate avoidance, Medicaid planning, and lake cottage succession? Those are the real Michigan issues. Here’s everything you need to know — no legal jargon, just clear answers from a son who’s been through it.
Lady Bird Deeds: Michigan’s Most Important Estate Planning Tool
Key fact: A Lady Bird deed (also called an enhanced life estate deed) lets your parents transfer real property to a beneficiary at death — outside of probate — while retaining full control during their lifetime. The legal authority comes from Michigan Land Title Standards, Section 9.3, and case law including Quarton v. Burton, 249 Mich. 474 (1930). Michigan does not have a Lady Bird deed statute — it’s recognized through title standards and decades of case law.
Here’s how it works: Your parents sign a deed that conveys their home (or lake cottage, or any real property) to a named beneficiary, but they reserve a life estate with enhanced powers. Those enhanced powers are the key — they mean your parents can sell the property, mortgage it, rent it out, or even revoke the deed entirely. The beneficiary has no current ownership interest. They only inherit if the property hasn’t been conveyed before the grantor’s death.
Why Lady Bird Deeds Matter More in Michigan
| Tool | Available in Michigan? | Notes |
|---|---|---|
| TOD deed (real property) | No | Michigan has not adopted the Uniform Real Property Transfer on Death Act |
| Lady Bird deed | Yes | Recognized via case law and Land Title Standards Section 9.3 |
| Tenancy by the entirety | Yes | Available for married couples; passes automatically to surviving spouse |
| Revocable living trust | Yes | Most comprehensive option; avoids probate for all asset types |
| TOD securities / POD accounts | Yes | Available for bank accounts, brokerage accounts, and securities |
Without TOD deeds, Michigan families have essentially two choices for passing real estate outside of probate: a Lady Bird deed or a revocable living trust. For families whose primary asset is a home, a Lady Bird deed can cost as little as $200-$500 — far less than creating a full trust.
Lady Bird Deeds and Medicaid Protection
This is where Michigan’s rules create a genuine planning advantage. Under MCL 400.112g, Michigan’s standard Medicaid estate recovery is limited to “all property and other assets included within an individual’s estate that is subject to probate administration.” Property that passes via Lady Bird deed is not part of the probate estate — it transfers directly to the beneficiary outside of probate.
Additionally, creating a Lady Bird deed is not considered a transfer for Medicaid’s 60-month look-back period. Because the grantor retains the enhanced power to sell, mortgage, or revoke the deed during their lifetime, the property is still considered the grantor’s asset. There’s no penalty period, no look-back issue, and no need to wait five years.
Important caveat: If a Medicaid recipient received benefits under a long-term care insurance partnership policy with assets disregarded, Michigan expands the definition of “estate” beyond probate assets to include joint tenancy, life estates, living trusts, and TOD/POD designations. This expanded recovery only applies in the partnership policy scenario — but it’s critical to know about if your parents used a partnership policy.
Lady Bird Deeds and Property Tax
A Michigan Tax Tribunal ruling (Docket #433005, December 2013) held that creating a Lady Bird deed does not trigger a transfer of ownership for property tax purposes. There is no “uncapping” of the property’s taxable value during the grantor’s lifetime. The transfer is deemed to occur at death — which may trigger uncapping at that point, but the deed itself doesn’t create a tax event while the grantor is alive.
Two Trust Types in Michigan
Michigan adopted its Trust Code as Article VII of the Estates and Protected Individuals Code (EPIC), codified at MCL 700.7101-700.7913. Under MCL 700.7602, a trust is presumed revocable unless the terms expressly provide that it is irrevocable — matching the national trend toward revocable as the default.
Revocable Living Trust
- Avoids probate — assets in the trust pass directly to beneficiaries
- You maintain full control — revocable and amendable during your lifetime
- Provides privacy — trust assets stay out of public court records
- Provides incapacity protection — successor trustee steps in without court guardianship
- Avoids ancillary probate — essential for Michigan snowbirds with Florida property
- Covers all asset types — not just real estate (unlike a Lady Bird deed)
- Note: Trust property is generally protected from standard Medicaid estate recovery (probate-only recovery)
Irrevocable Trust
- Once established, you give up control — the trade-off for asset protection and Medicaid planning
- Medicaid protection — irrevocable trusts funded 5+ years before application can protect assets from the 60-month lookback
- Directed trust — Michigan adopted the Uniform Directed Trust Act (MCL 700.7703a, effective March 2019); family retains investment control, trustee handles administration
- Decanting available — trustee can modify trust terms by distributing to a new trust (MCL 700.7820a, effective 2012)
- DAPT available — Michigan’s Qualified Dispositions in Trust Act (MCL 700.1042-700.1051, effective 2017) allows self-settled asset protection trusts
- 360-year trusts for personal property (MCL 554.91-554.94); real property limited to 90-year USRAP vesting period
Michigan Rules at a Glance
Probate Rules
- Court system: Probate Court in each of Michigan’s 83 counties
- Governing law: Estates and Protected Individuals Code (EPIC), Act 386 of 1998
- Small estate threshold: $51,000 (2025, adjusted for cost of living)
- Small estate affidavit: Available under MCL 700.3983 for estates at or below the threshold
- Creditor claims period: 4 months from date of publication of notice to creditors
- Filing fees: Filing fee + inventory fee (percentage of estate value, per MCL 600.871(1))
- Attorney fees: No statutory schedule — reasonable compensation; typically $200-$450/hour
- Typical timeline: 7-12 months average; complex estates 1-2+ years
Tax Rules & Property
- No state estate tax (effectively zero since January 1, 2005)
- No state inheritance tax (only applies to deaths on or before Sept 30, 1993)
- No state gift tax
- State income tax: Flat 4.25% (applies to trusts at same rate)
- Real estate transfer tax: $8.60 per $1,000 of value (0.86% combined state + county)
- Common law (separate property) state
- Tenancy by the entirety: Recognized for married couples
- TOD deeds: Not available for real property
- Lady Bird deeds: Available — primary probate avoidance tool for real estate
- Homestead exemption: $3,500 / 40 acres (general creditor; bankruptcy exemption ~$46,125)
Medicaid Planning in Michigan: The Lady Bird Deed Advantage
Michigan’s Medicaid estate recovery rules create one of the most favorable planning environments in the country — if you know how to use the tools available.
Under MCL 400.112g, standard estate recovery is limited to the probate estate. This means assets that pass outside of probate — through a Lady Bird deed, joint tenancy, POD/TOD designations, or a revocable trust — are generally not subject to recovery. Compare this to states like Wisconsin, which expanded recovery to reach into revocable trusts, joint tenancy, and even life insurance.
Key Medicaid figures for Michigan (2026):
- Individual asset limit: $2,000
- Community spouse resource allowance (CSRA): $32,532 minimum / $162,660 maximum
- Minimum Monthly Maintenance Needs Allowance (MMMNA): $2,643.75 (effective 7/1/2025)
- Look-back period: 60 months (5 years)
- Homestead recovery exemption: Portion of homestead value equal to or less than 50% of average home price in the county
The planning strategy is straightforward: a Lady Bird deed on the family home avoids both probate and Medicaid estate recovery — without triggering the 60-month look-back. For families concerned about long-term care costs, this is one of the most powerful single planning moves available in Michigan.
Official Sources
EPIC — Act 386 of 1998 · Michigan Trust Code (Article VII) · MCL 400.112g — Medicaid Estate Recovery · Uniform Power of Attorney Act (Act 187 of 2023) · Probate Court Fee Tables · MDHHS Estate Recovery · State Bar of Michigan
What Estate Planning Costs in Michigan
| What You’re Paying For | Typical Range in Michigan | When You’d Use It |
|---|---|---|
| Lady Bird deed | $200 – $500 | Passing a single property outside probate — the simplest option |
| Basic will + POA + patient advocate designation | $1,200 – $2,000 | Single person, straightforward assets, no trust needed |
| Revocable living trust (individual) | $2,500 – $5,000 | Individual wanting comprehensive probate avoidance + incapacity protection |
| Full estate plan (married couple — trust + will + POA + patient advocate + Lady Bird deed) | $3,000 – $7,000 | Most families — the complete package |
| Complex trust work (irrevocable, Medicaid planning, DAPT, business succession) | $5,000 – $10,000+ | Medicaid planning, cottage trusts, or multi-state property issues |
Michigan-specific planning note: Ask your estate planning attorney specifically about Lady Bird deeds for any real property. Since Michigan doesn’t have TOD deeds, a Lady Bird deed is often the fastest and most affordable way to keep a home or cottage out of probate — and it provides Medicaid protection that a TOD deed (in states that have them) does not. The State Bar of Michigan’s Lawyer Referral Service can connect you with trust and estate specialists.
With a Trust vs. Without (Probate) in Michigan
| Factor | With a Living Trust | Without (Probate) | Why It Matters |
|---|---|---|---|
| Timeline | Weeks to a few months | 7-12 months typical; complex estates 1-2+ years | Your family waits months — sometimes years — for assets to transfer |
| Cost | $2,500-$7,000 (one-time trust creation) | Filing fees + inventory fees + attorney fees (2-5% of estate) | On a $400K estate, probate can cost $8,000-$20,000 |
| Privacy | Completely private | Public record — filed with county Probate Court | Anyone can see what your parents owned and who receives it |
| Court involvement | None | Required — Probate Court in the decedent’s county | Michigan has 83 county Probate Courts; process varies by county |
| Real estate | Property in trust passes immediately | Goes through probate (Lady Bird deed or tenancy by the entirety also avoids probate) | No TOD deeds in Michigan — trust or Lady Bird deed is required |
| Multi-state property | No ancillary probate needed | Separate probate in each state where property is located | Michigan snowbirds with Florida property face ancillary probate without a trust |
| Incapacity protection | Successor trustee steps in seamlessly | Court-supervised guardianship/conservatorship needed | Guardianship is public, expensive, and emotionally difficult |
| Medicaid recovery | Trust assets generally protected (probate-only recovery) | Probate assets exposed to recovery | Michigan’s probate-only recovery makes non-probate transfers especially powerful |
Estate Planning Readiness Checklist for Michigan
Estate Planning Readiness Checklist — Michigan
Check each item you feel confident about. Your progress is saved automatically.
Most families begin exactly where you are. Here are the best next steps:
- What Is a Living Trust? — the complete beginner's guide
- Having the Estate Planning Talk — how to start the conversation
- How to Avoid Probate — why this matters
You have a solid foundation. Fill in the remaining gaps:
- Funding Your Trust — how to retitle assets
- The 5 Documents Every Family Needs
- Estate Tax & Gift Tax Guide
You understand the fundamentals and you're prepared to work with a professional. The next step is finding an estate planning attorney who knows Michigan law.
Common Estate Planning Mistakes in Michigan
Michigan does not offer transfer-on-death deeds for real estate. Without a trust or other mechanism, your home will likely go through probate.
Michigan is one of only five states that recognises Lady Bird deeds (enhanced life estate deeds). This powerful tool lets you transfer your home at death without probate while keeping full control during your lifetime — and it can protect Medicaid eligibility.
A trust only avoids probate for assets that have been retitled into it. An unfunded trust is just an expensive stack of paper. Real estate, bank accounts, and investments all need to be moved into the trust’s name.
A will does not avoid probate — it goes through it. A will tells the probate court what you want, but the court still controls the process. Only a trust, joint ownership, beneficiary designations, and certain deeds bypass probate entirely.
Retirement accounts (401k, IRA) and life insurance pass by beneficiary designation — not by your will or trust. Outdated designations (like a former spouse) override everything else in your estate plan.
The best way to avoid these mistakes? Work with an estate planning attorney who knows Michigan law. A qualified attorney will catch the state-specific issues that generic online advice misses.
Other Important Planning Tools in Michigan
Patient Advocate Designation (MCL 700.5506-5520)
Michigan uses the term “Patient Advocate Designation” — not “healthcare power of attorney” or “healthcare proxy.” This document appoints someone to make healthcare decisions if you become unable to participate in your own medical decisions. It can include end-of-life treatment preferences and anatomical gift decisions.
Execution requirements: Must be in writing, signed, dated, and executed voluntarily in the presence of two witnesses who also sign. No notarization required. Witnesses cannot be the patient’s spouse, parent, child, grandchild, sibling, physician, patient advocate, or employee of a treating facility or insurance provider.
Michigan also has MI-POST (Michigan Physician Orders for Scope of Treatment) — the state’s version of POLST. MI-POST is a medical order (not a directive) for people with serious advanced illness, signed by both the patient and their physician, nurse practitioner, or PA.
Learn more about healthcare directives →
Durable Power of Attorney (Act 187 of 2023 — Uniform Power of Attorney Act)
Michigan adopted the Uniform Power of Attorney Act effective July 1, 2024 (Act 187 of 2023, MCL 556.201-556.505), replacing the prior five-section EPIC provisions with a comprehensive 47-section framework. The new act provides a statutory form designed to be completed without an attorney.
To be durable, a power of attorney must be either acknowledged before a notary public or signed in the presence of two witnesses who also sign. A notarized POA receives a presumption of genuineness; a witness-only POA does not. Powers of attorney executed before July 1, 2024 remain valid if they complied with Michigan law at the time.
Learn more about powers of attorney →
Long-Term Care Planning
Michigan’s probate-only Medicaid estate recovery makes early planning especially effective. The 60-month look-back period means decisions made today affect Medicaid eligibility five years from now. For families concerned about long-term care costs, a combination of Lady Bird deeds (for real property), irrevocable trusts (for other assets), and careful spend-down strategies can protect a significant portion of the family’s wealth.
The individual asset limit is just $2,000 for nursing home Medicaid — planning early is essential. A Michigan elder law attorney can help structure a plan that protects assets while preserving eligibility.
Learn more about long-term care planning →
Lake Cottages, Snowbirds, and Multi-State Planning
The Michigan Cottage Problem
Michigan has more shoreline than any state except Alaska, and multi-generational family cottages are a defining feature of Michigan life — from Door County to Traverse City to the Upper Peninsula. But cottage succession is one of the most emotionally and legally complicated estate planning challenges in the state.
- Ownership fragmentation: Without a plan, a cottage passes to multiple heirs who may disagree about use, maintenance costs, and whether to sell
- Cottage trusts: A dedicated trust can establish rules for shared ownership, maintenance contributions, usage schedules, and buyout rights
- Lady Bird deeds: Frequently used for cottage transfers — avoids probate while preserving property tax treatment during the grantor’s lifetime
- Property tax uncapping: When property transfers at death, the taxable value may be “uncapped” to the current state equalized value — potentially a dramatic increase for long-held lakefront property
Michigan-Florida Snowbird Planning
Michigan has one of the largest snowbird populations migrating to Florida each winter. Families with property in both states face specific planning challenges:
- Domicile matters: Michigan has a 4.25% income tax; Florida has none. The 183-day rule helps establish Florida domicile, but Michigan can challenge the claim
- Ancillary probate: Without a trust, a Florida domiciliary who owns Michigan real property faces probate in both states
- Both states recognize Lady Bird deeds — a significant advantage for MI-FL families owning property in both states
- Document validity: Patient advocate designations and POAs should be drafted to comply with both Michigan and Florida law
- Solution: A revocable living trust that holds property in both states eliminates ancillary probate entirely
Find a Michigan Estate Planning Attorney
Find a Michigan Estate Planning Attorney
Michigan’s Lady Bird deed rules, probate-only Medicaid recovery, and new Uniform Power of Attorney Act create unique planning opportunities. Make sure your estate planning attorney understands how Lady Bird deeds interact with Medicaid planning and property tax uncapping — and has experience with Michigan’s EPIC framework.
Use the directories below to find a qualified estate planning attorney in your area, or email us and we’ll point you in the right direction.
Where are you in this journey?
- My parents are getting older — just starting to think about this
- We need a plan now — ready to take action
- Settling an estate — dealing with a parent’s passing
Michigan attorney directories:
- State Bar of Michigan
- State Bar Lawyer Referral Service — 1-800-968-0738 ($25 fee includes 25-minute initial consultation)
- American College of Trust and Estate Counsel (ACTEC) — Find a Fellow
- National Academy of Elder Law Attorneys (NAELA)
Questions to Ask Before You Hire a Michigan Estate Planning Attorney
- How many estate plans do you create per year, and do you regularly prepare Lady Bird deeds?
- Should my parents use a Lady Bird deed, a revocable living trust, or both for their real property?
- How does Michigan’s probate-only Medicaid estate recovery affect our plan?
- We have a family cottage on the lake — what’s the best way to handle cottage succession without splitting the family apart?
- My parents spend winters in Florida — how do we avoid ancillary probate in both states?
- What’s included in your flat fee (trust, pour-over will, POA, patient advocate designation, Lady Bird deed)?
- Will you help with retitling assets and funding the trust?
- How do you handle the new Uniform Power of Attorney Act requirements?
Recent Michigan Updates
- July 1, 2024 — Uniform Power of Attorney Act Takes Effect: Act 187 of 2023 replaced Michigan’s prior 5-section EPIC provisions with a comprehensive 47-section framework. Includes a statutory form for creating durable powers of attorney. Prior valid POAs remain effective.
- February 2024 — EPIC Omnibus Modernization: Bipartisan legislation signed by Governor Whitmer updated estate, trust, and probate provisions that hadn’t been revised in decades. Included cost-of-living adjustments for small estate thresholds.
- Small Estate Threshold: Increased to $51,000 for deaths in 2025 (adjusted annually for cost of living).
- No Changes to Tax Rules: Michigan continues to have no state estate tax (effectively zero since 2005), no inheritance tax, and no gift tax. The flat 4.25% state income tax rate remains unchanged.
- Federal — One Big Beautiful Bill Act (July 2025): Made the $15 million per-person federal estate tax exemption permanent. With no state estate tax and a $15M federal threshold, very few Michigan families face any estate tax.
Last reviewed: February 2026
Last updated: February 2026. I review Michigan’s estate planning rules quarterly and update this page whenever laws change. Bookmark it.
Go Deeper: Estate Planning Guides
| Guide | What You’ll Learn |
|---|---|
| Living Trusts: The Complete Guide | What a living trust is, how it works, and whether your family needs one — the foundation |
| How to Avoid Probate | Every method to keep your family out of court — trusts, TOD accounts, joint tenancy, and more |
| Having the Estate Planning Talk | How to start the hardest conversation your family will ever have — with scripts and strategies |
| Estate Tax Planning | Federal and state estate taxes, gift tax exclusions, and the step-up in basis explained |
| How to Fund Your Trust | The step everyone forgets — how to actually move your assets into your trust |
| The 5 Documents Every Family Needs | Trust, will, powers of attorney, healthcare directive — the complete package |
| Protecting Your Parents’ Legacy | Long-term care, Medicaid, blended families, and the threats nobody warns you about |
| Compare State Estate Planning Rules | See how your state compares on probate costs, estate taxes, and trust-friendly features |