Estate Planning Law in Michigan: Overview
Michigan does not impose a state estate tax or inheritance tax. The state adopted the Estates and Protected Individuals Code (EPIC), which is based on the Uniform Probate Code. Michigan is a common law property state with an elective share. The state is notable for recognizing "lady bird deeds" (enhanced life estate deeds), which are a popular Medicaid and probate avoidance planning tool. Michigan does not recognize holographic wills; two witnesses are required. The small estate threshold is $25,000. Michigan has comprehensive trust laws under the Michigan Trust Code.
Key Statutes & Deadlines
State Estate Tax
No state estate tax
MCL § 205.232
Small Estate Threshold
$25,000 for small estate procedures
MCL § 700.3982
Will Execution
Two witnesses; no holographic wills
MCL § 700.2502
Lady Bird Deed
Enhanced life estate deeds recognized
Common law recognition
Elective Share
Greater of $25,252 or one-half of intestate share
MCL § 700.2202
Lady Bird Deeds
Michigan is one of the few states that widely recognizes "lady bird deeds" (enhanced life estate deeds). A lady bird deed allows the property owner to retain full control of the property during life—including the right to sell, mortgage, or revoke the deed—while designating a beneficiary to receive the property at death without probate. The property does not pass through the estate and is generally not countable for Medicaid purposes if properly executed. This makes lady bird deeds a popular planning tool for both probate avoidance and Medicaid planning in Michigan.
EPIC and Probate Procedures
Michigan's EPIC (based on the UPC) provides informal and formal probate tracks. Informal probate requires minimal court involvement for uncontested estates. The small estate threshold is $25,000, below which a simplified affidavit process is available. Creditor claims must be filed within four months of notice. Michigan Probate Courts in each county handle estate administration, guardianship, and conservatorship.
Elective Share and Spousal Rights
Michigan's elective share provides the surviving spouse with the greater of a fixed dollar amount ($25,252, adjusted periodically) or one-half of the amount the spouse would have received under intestacy. Michigan also provides homestead allowance, exempt property allowance, and a family allowance during administration. These protections ensure a surviving spouse cannot be completely disinherited.
Michigan Court System
Michigan has a Probate Court in each of its 83 counties. Each court is presided over by an elected Probate Judge. Michigan Probate Courts handle estate administration, will contests, trust disputes, guardianship, conservatorship, and mental health commitments. EPIC allows informal probate with minimal court involvement. Appeals go to the Circuit Court and then to the Michigan Court of Appeals.
Damages & Penalties
Michigan has no state estate or inheritance tax. Fiduciaries face personal liability for breach of duty. Michigan courts can remove fiduciaries, surcharge them for losses, and award attorney fees. The state criminalizes will destruction and fraud. Michigan's Medicaid estate recovery program can seek reimbursement from a deceased recipient's estate, making Medicaid planning (including lady bird deeds) an important consideration.
Recent Legislative Changes
Michigan has updated its trust code and EPIC provisions. The state continues to recognize lady bird deeds as a planning tool. Michigan has modernized its guardianship procedures with enhanced reporting and monitoring.
Key Takeaways
- Michigan has no state estate or inheritance tax.
- Lady bird deeds provide probate avoidance and potential Medicaid planning benefits.
- EPIC (based on UPC) provides streamlined probate.
- Holographic wills not recognized; two witnesses required.
- Elective share provides the greater of $25,252 or one-half of the intestate share.
- Small estates under $25,000 qualify for simplified procedures.
- Each of Michigan's 83 counties has an elected Probate Court.
Frequently Asked Questions
What is a lady bird deed in Michigan?
A lady bird deed (enhanced life estate deed) lets you keep full control of property during life while designating a beneficiary to receive it at death without probate. It is also useful for Medicaid planning.
Does Michigan have a state estate tax?
No, Michigan has no state estate or inheritance tax. Only federal estate tax applies to estates exceeding the federal exemption.
Are holographic wills valid?
No, Michigan does not recognize holographic wills. A valid will requires two attesting witnesses.
What is the small estate threshold?
Michigan allows simplified procedures for estates under $25,000.
What is the elective share in Michigan?
The surviving spouse can elect to receive the greater of $25,252 (adjusted periodically) or one-half of what the spouse would have received under intestacy.
How does Medicaid estate recovery work in Michigan?
Michigan's Medicaid program can seek reimbursement from a deceased recipient's estate for benefits paid. Lady bird deeds and irrevocable trusts are planning tools used to protect assets from Medicaid recovery.
This guide is provided for general informational purposes only and does not constitute legal advice. Michigan laws may change, and the information here may not apply to your specific situation. For advice tailored to your circumstances, consult with a qualified Michigan attorney.