Estate Planning

Michigan Estate Planning Lawyers Protecting What Your Family Has Built

You’ve spent decades building something—a home, a career, savings, maybe a cottage on the lake your kids grew up visiting every summer. Estate planning is how you make sure all of it goes where you want it to go, on your terms, without the state of Michigan deciding for you.

Too many families put this off. Then something happens—a diagnosis, an accident, a death—and suddenly the family is dealing with probate court, fights over property, a tax bill nobody expected, or a nursing home draining everything that was supposed to be passed down. Every one of those outcomes is preventable with the right plan in place.

Michigan has its own set of rules governing how property transfers at death, who can make decisions if you’re incapacitated, and how the state taxes inherited real estate. Those rules are found in the Estates and Protected Individuals Code (EPIC—MCL 700.1101 et seq.), and they don’t always work the way people assume. A will alone won’t avoid probate. Joint ownership creates risks most people don’t think about. And if you own lakefront property in Northern Michigan, the tax consequences of a poorly planned transfer can cost your family tens of thousands of dollars.

At Neumann Law Group, our estate planning attorneys work with families across Michigan—from Traverse City to Grand Rapids to Detroit—to build plans that actually hold up. Not boilerplate documents pulled off a shelf. Plans built around your family, your property, and Michigan law.

Do I need a will, a trust, or both?

This is the most common question we hear, and the honest answer is: most Michigan families need both.

A will is the foundation. It names who gets your property, who serves as personal representative (Michigan’s term for executor), and—if you have minor children—who raises them. Under Michigan law, a valid will must be in writing, signed by you, and witnessed by at least two people (MCL 700.2502). Michigan also recognizes holographic wills—handwritten, unwitnessed wills—as long as the signature and material provisions are in your handwriting (MCL 700.2502(2)). But holographic wills invite challenges, and we rarely recommend them.

The problem with a will standing alone is that it doesn’t avoid probate. Every asset that passes through your will goes through Michigan’s probate court system, which means delays, costs, and a public record of everything you own and who receives it.

That’s where a revocable living trust comes in. A living trust holds your assets during your lifetime—real estate, bank accounts, investment accounts—and transfers them to your beneficiaries when you die, entirely outside of probate. You maintain full control as trustee while you’re alive. You can change the terms, add or remove assets, or revoke the trust altogether. When you pass away, your successor trustee distributes the assets according to the trust’s instructions, with no court involvement.

The will acts as a safety net for anything that didn’t make it into the trust—property you acquired after creating the trust, assets you overlooked, or items you intentionally left out. This backup document is called a pour-over will, and it directs any remaining assets into the trust at death.

When a trust matters most

A trust isn’t just for wealthy families. If you own real estate in Michigan—particularly a home and a second property like a cottage—a trust can save your family significant time and money. Probate typically takes seven to 12 months and gets more expensive when real property or beneficiary disagreements are involved. Families with blended marriages, a child with special needs, or concerns about a beneficiary’s spending habits also benefit from trusts, because trusts give you control over how and when assets are distributed.

How do I avoid probate in Michigan?

Probate in Michigan is governed by EPIC (MCL 700.3101 et seq.) and handled by the probate court in the county where the deceased person lived. It’s not always as burdensome as people fear, but it does involve court fees, attorney costs, time, and a public record. For many families, avoiding it entirely—or at least minimizing what passes through it—is a reasonable goal.

Here are the primary strategies Michigan attorneys use to keep assets out of probate:

Revocable living trust. As discussed above, assets held in a properly funded trust bypass probate entirely. The key word is “funded”—the trust only works for assets you actually transfer into it. An unfunded trust is just a document sitting in a drawer.

Lady Bird deed. For real estate, a Lady Bird deed is one of the most powerful tools in Michigan estate planning. It transfers your property to a beneficiary at death while letting you keep complete control during your lifetime—including the right to sell, mortgage, or revoke the deed. The property avoids probate and, critically, avoids Medicaid estate recovery. We’ll cover Lady Bird deeds in detail below.

Joint ownership with right of survivorship. Adding a spouse or child as a joint owner means the property passes directly to the survivor at death. But the co-owner gains immediate legal rights, which means exposure to their creditors, divorce, and financial decisions. For most families, a trust or Lady Bird deed is safer.

Payable-on-death and transfer-on-death designations. Bank accounts, investment accounts, and vehicles in Michigan can carry beneficiary designations that transfer directly at death.

Small estate affidavit. Estates that don’t include real property and meet the cost-of-living-adjusted threshold (currently $51,000 for 2025 under MCL 700.3983 and MCL 700.1210, after subtracting liens and encumbrances) can skip formal probate using an affidavit. Because the threshold adjusts annually, families should confirm the current limit before relying on the procedure.

The most effective plans use several of these tools together. A trust holds the major assets. A Lady Bird deed covers the house. Beneficiary designations handle the bank accounts and retirement funds. And a pour-over will catches anything that falls through the cracks.

What is a Lady Bird deed, and why do Michigan attorneys use them?

A Lady Bird deed—technically an enhanced life estate deed—is one of the most versatile estate planning tools available in Michigan.

Here’s how it works. You sign a deed naming a beneficiary (the “remainderman”) who will receive the property when you die. Unlike a regular life estate deed, you retain complete control during your lifetime—you can sell, refinance, lease, or revoke the deed without the remainderman’s consent. At death, the property transfers automatically, outside of probate.

The Medicaid advantage is what makes Lady Bird deeds especially valuable for Michigan families. Under a standard life estate deed, if you transfer property and later apply for Medicaid, the transfer may trigger a penalty period during the five-year lookback. And even if the timing is right, the property may still be subject to Medicaid estate recovery—meaning the state can seek reimbursement from the property after your death.

A Lady Bird deed avoids both problems. Because you retain full control (including the power to revoke), under current Michigan Medicaid policy, the property generally isn’t treated as a completed transfer for Medicaid purposes. And because the property passes outside of probate, it’s not part of the probate estate that Michigan can claim against for Medicaid recovery.

Lady Bird deeds are commonly used for family homes, cottages, vacant land, and rental properties. They’re especially popular in Northern Michigan, where families want to pass lakefront property to the next generation without triggering probate, Medicaid recovery, or—as we’ll discuss next—a property tax uncapping event.

Michigan is one of a limited number of states that recognize Lady Bird deeds. If your attorney isn’t familiar with them, that’s a red flag.

How do I pass our family cottage to my kids without the property taxes doubling?

This is the question that brings more Northern Michigan families into our office than almost any other. And it’s a question with real financial stakes.

Under Michigan’s Proposal A—codified at MCL 211.27a—your property’s taxable value is capped. It can only increase by the rate of inflation or 5%, whichever is less, each year. That cap is the reason a cottage your parents bought in 1985 for $60,000 might have a taxable value of $120,000 even though its market value is $900,000. The property taxes are based on that capped taxable value—so the annual bill stays manageable.

When property transfers to a new owner, the cap comes off. The taxable value resets—or “uncaps”—to the property’s current State Equalized Value (SEV), which is roughly 50% of market value. For lakefront properties on Torch Lake, Glen Lake, Crystal Lake, Elk Lake, or Grand Traverse Bay, that uncapping can mean property taxes jumping from $3,000 or $4,000 per year to $10,000, $12,000, or more. Overnight.

The parent-to-child transfer exemption

Michigan does provide an exception. Under MCL 211.27a(7)(s), a transfer from a parent to a child—or child to parent—is exempt from uncapping, but only if the property is the transferee’s principal residence and a Principal Residence Exemption (PRE) affidavit is filed. For a family cottage that nobody lives in full-time, this exemption typically doesn’t apply. That’s the catch that surprises most families.

Planning strategies that work

When the PRE exemption doesn’t apply—and for most cottage properties, it won’t—the goal shifts to structuring ownership in a way that either avoids a “transfer of ownership” under the statute or manages the tax impact over time. Common approaches include:

Cottage trusts. A properly drafted trust can hold the property and allow multiple family members to share ownership, use, and maintenance costs. The trust terms can address everything from scheduling and expenses to what happens if one sibling wants to sell and the others don’t.

LLCs for cottage ownership. Transferring the property into a family LLC can provide liability protection and a framework for shared decision-making. LLC operating agreements can include buyout provisions and rights of first refusal to prevent forced sales.

Lady Bird deeds combined with trust planning. In some cases, a Lady Bird deed is used to transfer the property into a trust at the owner’s death, combining the probate-avoidance benefit of the deed with the long-term management structure of the trust.

Every cottage succession plan is different because every family is different. The number of children involved, whether anyone wants to live there full-time, the property’s value, and the family’s ability to absorb a tax increase all factor into the strategy. What matters is planning before the transfer happens—because once the property uncaps, you can’t undo it.

For more on this topic, see our page on asset protection for more on preserving family property.

What happens if I die without an estate plan in Michigan?

If you die without a will or trust, Michigan’s intestate succession laws decide who gets your property. The court applies a statutory formula set out in EPIC, and the results often surprise people.

Your spouse doesn’t automatically get everything. If you have children who are also your spouse’s children, your surviving spouse receives the first $150,000 (adjusted for inflation) plus half the balance. The rest goes to your children. If you have children from a prior relationship, the formula shifts—and your children from that earlier relationship receive a larger share.

If you’re unmarried with no children, the estate passes to your parents, then siblings, then more distant relatives. If no relatives can be found, the property escheats to the state.

Intestate succession also means no one has been named as personal representative, no durable power of attorney is in place, and there’s no plan for the cottage or any other property. Dying without a plan doesn’t just create legal problems—it creates family problems that last for years.

How can I protect my assets from nursing home costs?

Long-term care is expensive. In Michigan, a private nursing home room can exceed $10,000 per month. Without planning, a few years of care can consume everything a family has saved.

Medicaid—administered by the Michigan Department of Health and Human Services (MDHHS)—covers long-term care costs, but only after you’ve spent down your assets to very low levels. Michigan follows a five-year lookback rule: asset transfers within five years of applying for Medicaid are scrutinized, and improper transfers result in a penalty period of ineligibility. That five-year window is why early planning matters.

Strategies Michigan families use

Lady Bird deeds protect real estate from Medicaid estate recovery without triggering the five-year lookback—one of the reasons they’re so widely used in Michigan.

Irrevocable trusts, when properly structured and funded more than five years before a Medicaid application, can shelter assets from countability. But “irrevocable” means what it says—you give up control of the assets, and the trust terms generally can’t be changed.

Spousal protections are built into the Medicaid rules. The non-applicant spouse (the “community spouse”) can retain a certain amount of assets—called the Community Spouse Resource Allowance (CSRA)—which is adjusted annually. Understanding these thresholds is critical to preserving as much as possible for the healthy spouse.

Asset protection planning for Medicaid purposes requires careful coordination between estate planning and elder law. The rules are technical, the stakes are high, and mistakes are difficult to undo. This is not an area where DIY documents or generic templates are adequate.

Who makes medical and financial decisions if I become incapacitated?

This is the part of estate planning that isn’t about death—it’s about what happens if you’re alive but unable to make decisions for yourself. A stroke, an accident, a dementia diagnosis—any of these can leave you unable to manage your finances or communicate your medical wishes.

Durable power of attorney (financial)

A durable power of attorney under MCL 700.5501–5505 authorizes someone you trust—your “agent”—to handle financial matters on your behalf. Paying bills, managing investments, filing taxes, selling property, dealing with insurance companies. The word “durable” means it remains effective even if you become incapacitated, which is precisely when you need it most.

Without a durable power of attorney, your family may need to petition the court for a conservatorship just to access your bank accounts or pay your mortgage. That process takes time, costs money, and puts a judge—not you—in charge of choosing who manages your finances.

Patient Advocate Designation (healthcare)

Michigan doesn’t use the term “healthcare power of attorney.” Instead, it has the Patient Advocate Designation under MCL 700.5506–5515. This document names someone to make medical decisions for you if you can’t make them yourself.

There are specific rules. The designation must be signed by two witnesses, and those witnesses cannot be your spouse, parent, child, grandchild, sibling, presumptive heir, or your health or residential care provider. If you want your patient advocate to have authority over end-of-life decisions—including the withdrawal of life-sustaining treatment—the designation must include specific language granting that authority. Without that language, the advocate’s power is limited.

A Patient Advocate Designation is separate from a Do Not Resuscitate (DNR) order, which is governed by a different Michigan statute (MCL 333.1051–1067). Many families need both, but they serve different functions.

For families dealing with a progressive cognitive condition, Alzheimer’s planning combines these documents with strategies for long-term care, asset protection, and eventual guardianship considerations—all ideally put in place while the individual still has legal capacity to sign documents.

When should I consider a guardianship or conservatorship?

When someone has already lost the ability to make decisions—and no power of attorney or patient advocate designation was signed while they had capacity—the only remaining option is court intervention.

Michigan’s adult guardianship process is governed by EPIC (MCL 700.5301 et seq.). A guardian makes personal decisions for an incapacitated adult—where they live, what medical care they receive. A conservator manages financial affairs. Sometimes the same person serves both roles.

The court requires clear and convincing evidence of incapacity. Michigan law also emphasizes the least restrictive alternative, meaning the court must consider a limited guardianship before granting full guardianship. Proceedings require medical evaluations and a court hearing, can be contested by family members, and are expensive—which is exactly why we counsel families to get powers of attorney and patient advocate designations in place early.

The intersection of guardianship and Alzheimer’s planning is especially important. If a parent has been diagnosed with early-stage dementia, there’s often a limited window to execute estate planning documents while they still have the legal capacity to do so. Once that window closes, guardianship may be the only path forward.

What does the Michigan probate process actually look like?

Despite everyone’s best efforts, some estates go through probate—either because no trust was in place, because assets weren’t properly titled, or because a dispute arises. Probate is filed in the county where the deceased person was domiciled. For Northern Michigan families, that’s typically the Grand Traverse County Probate Court.

Michigan probate involves three levels of administration. Informal administration—the most common—requires no court hearing. The personal representative is appointed by the probate register, and the estate is administered without direct judicial oversight. Formal administration requires a court hearing and is used when disputes exist over the will’s validity or asset distribution. Supervised administration involves court oversight of the entire process and is rare.

Creditors must be notified and given four months to file claims. The personal representative inventories assets, pays debts and taxes, and distributes the remaining estate. Straightforward probate typically takes seven to 12 months; contested estates or those involving real property sales take considerably longer.

For estates that don’t include real property and meet the current threshold (cost-of-living adjusted under MCL 700.1210—$51,000 for 2025), the small estate affidavit process (MCL 700.3983) allows heirs to collect assets without formal probate. Trust administration avoids probate entirely, which is one of the primary reasons trusts are central to most Michigan estate plans.

Talk to a Michigan estate planning attorney today

Your family’s circumstances are specific. Your estate plan should be, too. Whether you need a will, a trust, a Lady Bird deed, Medicaid planning, or a comprehensive plan that addresses all of it, the estate planning attorneys at Neumann Law Group can help you build a plan grounded in Michigan law and tailored to your property, your family, and your goals. We serve families from our offices in Traverse City, Grand Rapids, and Detroit. Call (800) 525-6386 to schedule a free consultation.

Frequently asked questions about estate planning in Michigan

Q: How much does estate planning cost in Michigan? A: Costs vary depending on the complexity of your plan. A basic will is less expensive than a comprehensive trust-based plan with Lady Bird deeds, powers of attorney, and healthcare directives. During your free consultation, we’ll discuss your situation and provide clear pricing before any work begins.

Q: What’s the difference between a will and a trust? A: A will directs how your property is distributed after death but must go through probate. A trust holds your assets and transfers them to beneficiaries without probate, saving time and keeping your affairs private. Most families benefit from having both.

Q: Do I need to update my estate plan after a divorce? A: Yes. Michigan law automatically revokes certain provisions that benefit a former spouse after divorce (MCL 700.2807), but relying on automatic revocation is risky. You should update your will, trust, beneficiary designations, powers of attorney, and patient advocate designation after any major life change.

Q: Is a handwritten will valid in Michigan? A: Michigan recognizes holographic wills under MCL 700.2502(2), provided the signature and material portions are in the testator’s handwriting. However, holographic wills are more easily challenged and often lack the detail needed for complex estates. We strongly recommend a formally witnessed will.

Q: Can I write my own power of attorney using an online form? A: Technically yes, but a poorly drafted power of attorney can be rejected by banks, title companies, or healthcare providers. Michigan has specific statutory requirements for both durable powers of attorney and patient advocate designations, and errors can leave your family without the authority they need in a crisis.

Q: What is the difference between a patient advocate designation and a power of attorney? A: A durable power of attorney (MCL 700.5501–5505) covers financial decisions—paying bills, managing accounts, selling property. A patient advocate designation (MCL 700.5506–5515) covers medical decisions, including end-of-life care. They serve different purposes, and most estate plans include both.

Q: How often should I review my estate plan? A: Review your plan every three to five years, or sooner after a major life event—marriage, divorce, the birth of a child or grandchild, a significant change in assets, a move to or from Michigan, or a change in health status. Estate plans that sit untouched for decades often fail to reflect the client’s current wishes.

Q: Does Michigan have an estate tax? A: Michigan does not impose a separate state estate tax. However, federal estate tax may apply to very large estates. Even if estate tax isn’t a concern, income tax implications on inherited assets—particularly retirement accounts and appreciated property—still require careful planning.

Q: Can my children contest my will? A: Anyone with legal standing—typically heirs and beneficiaries—can challenge a will in Michigan on grounds such as lack of capacity, undue influence, fraud, or improper execution. Proper estate planning, including clear documentation of your wishes and compliance with Michigan’s statutory requirements, reduces the risk of a successful challenge.