By Jehan Crump-Gibson
Series: Matters of Life and Death
While everyone needs an estate plan, that does not mean everyone’s plan will look the same. Your estate plan is very personal. What makes it different from your neighbor’s or a good friend’s is your unique financial situation, wishes and family. Every plan does not require a thick binder filled with hundreds of pages of documents. In some cases, the main asset to protect is the home someone is living in.
Let’s say we have Betty. Betty is eighty years old with one daughter, who is in her fifties. She owns her modest home, which has been paid off for decades. She does not own expensive jewelry, clothing, art or anything high in monetary value. She has a checking account where her social security and small pension are deposited every month.
Most of that income is spent on groceries, copays, utilities, property taxes and insurance on the home. Lastly, Betty has a burial policy. She paid for a burial plot years ago at one of the cemeteries. Her intention is for her house and whatever is left in her bank account to go to her only daughter.
For Betty, it does not make much sense to draw up complicated estate planning documents. Instead, Betty should make sure that her daughter is named as a beneficiary or the transfer-on-death (TOD) designation on her bank account and the beneficiary on her burial policy. She can do a simple will for her personal effects. For her most sizable asset, Betty has an option that will allow her daughter to avoid probate court if something happens to her: the Ladybird deed.
A Ladybird deed is a specific type of deed that transfers property to a person or entity. As of now, it is only allowed in Michigan, Florida, Texas, West Virgina, and Vermont.
The deed allows you to maintain control over your property while you are still living. You can sell it, refinance it, rent it out, or even give it away if you want. If it is still in your name when you pass away, it will automatically pass to the person (or people), or entity you named on the deed, without the need for probate court.
This is different than a Quit Claim deed, which people will often use, not realizing that it adds someone to your deed at that moment, giving them the same rights to your property as you have. This means that if you want to lease, sell or mortgage your property, the person that you add on the Quit Claim deed must sign off on it.
What’s more, if the person you add on the Quit Claim deed files for bankruptcy, gets sued or files for divorce, your house is a countable asset. You certainly want to avoid that. With the Ladybird deed, you can.
The beauty of estate planning is that it is not one-size-fits-all and that there are tools to help everyone, no matter what your assets or your family look like. Invest in yourself and your family. Get in touch with a qualified, experienced estate planning attorney to set your plan up today!
Attorney Jehan Crump-Gibson is the Co-Founder and Managing Partner at Great Lakes Legal Group PLLC, where she concentrates her practice in probate and estate planning, business and real estate matters. Great Lakes Legal Group is a growing black-owned law firm serving clients throughout the state of Michigan and in federal courts across the country. Jehan has served as Faculty for the National Business Institute and the Institute of Continuing Legal Education concerning business, probate and estate planning matters. She is a legal analyst with Fox2 Detroit’s The Noon and the author of the book A Matter of Life and Death.
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