A Lady Bird Deed is a mechanism used to transfer property to your heirs. When drafted correctly by your elder law attorney, it will allow your heirs to receive your property when you pass away. It can be used as a tool to help you with your estate development and with your Medicaid planning. Our experienced Michigan elder law attorneys at Grewal Law PLLC can help you understand the benefits of using this planning device.
The Lady Bird Deed is otherwise known as an enhanced life estate. It is a tool that allows you to transfer ownership to your heirs at your natural death. A major benefit of this method is that you are still able to sell, lease or mortgage the property without their permission during your lifetime. Essentially you still retain rights to the real estate even though you have an heir added to through the deed.
Benefits for You & Your Family
One of the main benefits of having a Lady Bird Deed for a piece of property is that your home will not have to go through probate when you pass away. The real estate will be automatically transferred to your named beneficiary on your death. Avoiding probate can save your family months of headache and can save them money associated with legal fees and court costs.
Because the property is directly passed to your beneficiary the property taxes will not increase. Michigan property tax is capped under Proposal A for anyone who owned a piece of property prior to 1995. If you have owned your property since this time your heirs will receive the benefit of the lower property tax when a Lady Bird Deed is used.
In addition to saving on property taxes, your heirs will not have to pay any gift taxes. Your heirs will not have to pay a gift tax since the property does not become theirs until your death.
Applying for Medicaid Coverage
After the age of 65, you may need to apply for Medicaid coverage in addition to the Medicare coverage you already receive from the government. Medicaid is based on financial need compared to Medicare which is provided to everyone. You must be Medicaid eligibility in order to receive coverage. The benefit is used for things such as stays at rehab facilities or in nursing homes. Learn more about Medicare Planning and how our experienced attorneys at Grewal Law PLLC can help you make plans for the future.
There is a five-year lookback period on your assets in order for you to be Medicaid eligibility in Michigan. Owning a valuable piece of property could reduce your ability to qualify for Medicaid.
The rules vary depending on if the real estate is your primary residence or a second home or piece of property. Using a Lady Bird Deed to move these assets out of your name could trigger a penalty and could cause you not to be eligible for benefits if not done properly. Therefore, it is imperative for a Medicare planning attorney to work with you on this type of estate planning.
Another added benefit is the Michigan Estate Recovery on your property is avoided through the use of a Lady Bird Deed. Under estate recovery, the Michigan Department of Health and Human Services can seek repayment for Medicaid benefits after someone passes away.
Using Lady Bird Deeds for Your Estate Planning
Our Michigan estate planning lawyers are ready to help you understand how a Lady Bird Deed can be used for you. Making plans now can save your family problems when dealing with your estate later. Call us at Grewal Law PLLC to help you explore whether or not a Lady Bird Deed is a good option for you.
Contact us for your no obligation quote at (888) 211-5798.