Does Michigan Allow Transfer on Death Deeds?

Why TOD deeds aren't available in Michigan

Michigan has not adopted the Uniform Real Property Transfer on Death Act or any TOD / beneficiary deed statute. No authorizing provision exists in MCL ch. 565 (conveyances of real property) or MCL ch. 700 (Estates and Protected Individuals Code). Michigan instead relies on the common-law enhanced life estate ("Lady Bird") deed, validated by Michigan Land Title Standard 9.3 (6th ed.).

Michigan recognizes enhanced life estate ("Lady Bird") deeds as a common-law conveyance validated by Michigan Land Title Standard 9.3 (6th ed.): a life-estate holder "coupled with an absolute power to dispose of the fee estate by inter vivos conveyance" may convey a fee simple during the holder's lifetime. This avoids probate while allowing the grantor to retain full lifetime control — including the right to sell, mortgage, or revoke without the remainder beneficiary's consent. The grantor's retention of a life estate is itself not a transfer of ownership for property-tax purposes (MCL 211.27a(7)(c)); on the grantor's death, the termination of that life estate is exempt from uncapping when the transferee is a close relative (spouse's or transferor's mother, father, brother, sister, son, daughter, grandson, or granddaughter) and the residential property is not used commercially (MCL 211.27a(7)(d), added by 2015 PA 243); a direct transfer of residential real property to such a relative is likewise exempt under MCL 211.27a(7)(u) (added by 2014 PA 310). Treasury guidance is in Michigan Dept. of Treasury Revenue Administrative Bulletin 2017-5. A Lady Bird deed, like any Michigan real-property conveyance, must be in writing, signed by the grantor, and acknowledged before a notary public, judge, or clerk of a court of record (MCL 565.8); it must be recorded with the county register of deeds to be valid against a subsequent good-faith purchaser whose deed is first recorded (MCL 565.29, the recording act). Michigan does not require subscribing witnesses on deeds executed after March 4, 2002 — only notarial acknowledgment (2002 PA 23, amending MCL 565.8).

Alternatives for Michigan

These mechanisms transfer real property at death without probate in Michigan:

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  Revocable living trust
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  Enhanced life estate deed (Lady Bird deed) — authorized under Mich. Land Title Std. 9.3 (6th ed.); uncapping exemption under MCL 211.27a(7)(d) and (7)(u)
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  Joint tenancy with right of survivorship (MCL 554.43–554.45)

Consult a licensed attorney for help choosing the right mechanism for your situation.