Q: What is a Lady Bird Deed? Can it be used to transfer ownership of our second home in Michigan to our family outside of probate?
A: If you look up Lady Bird Deeds on the Internet, this is what you'll find out: First, the deed's name comes from former First Lady Claudia Alta Taylor Johnson. She apparently became associated with this type of deed because President Lyndon Johnson used one to transfer property to her after his death.
The second thing that you will find is Lady Bird Deeds are also referred to as enhanced life estate deeds. That's sounds cool but what the heck does that mean?
An enhanced life estate deed allows a grantor to not only retain a life estate interest in a property but also an unlimited power of appointment. Clear as mud right?
What an enhanced life estate deed essentially does is allow a person to name a beneficiary on real estate. The grantor keeps the exclusive use and control of the property during their lifetime, i.e. the life estate interest, the right to sell or transfer it at any time and the right to change their mind if they want to leave the property to someone else, i.e. unlimited power of appointment.
Does this sound familiar? If not, it should. Indiana's version of a Lady Bird Deed is the transfer on death deed, which Indiana authorized a few years ago under the Indiana Transfer on Death Property Act. Since transfer on death deeds name a beneficiary, probate isn't required to transfer title following the death of the owner.
Now, before I answer your specific question, you should understand that I am not licensed in the state of Michigan and I can only speak in generalities. I do not want to be on the business end of the Michigan Bar.
Assuming that Michigan recognizes Lady Bird Deeds or some version of it (and according to the Internet, they do), you should be able to transfer title to your property at death without needing to open an ancillary estate. That should accomplish your goal of probate avoidance. However, I can't tell you that this the best way to accomplish your goal.
If you want to find out if a Lady Bird Deed will address your estate planning needs, I suggest that you contact a Michigan attorney and discuss your goals. It may very well solve your problem, but it might not. Before making your decision, talk to someone in the know.