And now for something completely different…the “Lady Bird” Deed
A “Lady Bird” deed is an estate planning tool named after deeds used by President Lyndon B. Johnson to transfer real property to his wife “Lady Bird” Johnson. When using this deed, the grantor conveys her interest in the property to a grantee, yet retains a life estate with full power to convey, mortgage or otherwise alienate the property. The grantor may use this power while alive, but once deceased, the grantee is vested with fee title. “Lady Bird” deeds are valid in Michigan if drafted properly.
There are many variations of “Lady Bird” deed. The most commonly used is where the grantor, usually a parent conveys the property to the grantee children. The grantor reserves for herself a life estate coupled with the power to sell, mortgage or otherwise alienate the property.
The end result is that the grantor/parent can sell, convey or mortgage the real property at any time during her life and upon death the property passes to the grantee automatically by operation of law.
For example, Marge Simpson conveys Blackacre to Bart Simpson and Lisa Simpson and reserves for herself a life estate coupled with an absolute power to convey the property during her lifetime. Marge can sell Blackacre during her lifetime without the consent of Bart and Lisa. Also, after Marge’s death, Bart and Lisa own Blackacre in fee.
I recommend that you talk to a real property/estate planning attorney if you think a “Lady Bird” deed may be right for you.
