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MICHIGAN PROBATE 58: Lady Bird deed did not restrict the grantor’s ability to execute another deed.

At the center of this case is a dispute concerning the home that belonged to a married couple (D and B) who are both now deceased.

L met the D and B when she was a child, and they eventually became akin to parents to her. Eventually, B developed dementia while D developed various physical ailments. The couple moved into a rehabilitation home. Thereafter, the couple became concerned with the costs of the facility and missed living in their home. L claimed that she reached an agreement with D and B; she would move into their home and provide them with around-the-clock care. In return, D and B would deed their home in Michigan to L.

Ladybird Deed

D executed a Lady Bird deed on behalf of himself and B that provided for the transfer of the home to L upon their deaths. In this deed, the couple conveyed the property to themselves for their lifetime. It further stated that if D and B have not previously conveyed the property prior to their death or the survivor of them has not previously conveyed the property prior to the survivor’s death then it was conveyed to L.

Although L alleged that the property was conveyed in exchange for 24/7 caregiving services, the deed expressly provided that the consideration was $0.00.

Appointment of Conservator

D and B were released to L, and she allegedly began providing them with around-the-clock care. Shortly after the return home, B’s mental condition deteriorated, and she allegedly made threats of physical harm. B was returned to the medical facility. Shortly after, D died unexpectedly.

B was unable to make healthcare and financial decisions previously handled by D. The probate court found that B was an incapacitated individual and lacked sufficient capacity to make informed decisions. The probate court appointed RPC as conservator. The probate court advised that it typically required an inventory of assets within 56 days. RPC executed a new Lady Bird deed that would pass the house to the D & B’s trust instead of L. B died a year later.

Probate Petition

L filed a petition to set aside the second Lady Bird deed, to surcharge RPC as the conservator, and to add the trust as a party. RPC moved for summary disposition under MCR 2.116(C)(8), alleging that the first Lady Bird deed only gave the grantor a life tenancy and did not restrict the grantor’s ability to sell or mortgage the property. Therefore, RPC was entitled to divest the remainderman beneficiary before the death of the grantor. RPC alleged that any interest by L was divested prior to B’s death, and therefore, L did not have an interest or standing in the action, warranting summary disposition.

The probate court granted summary disposition in favor of RPC. The trial court concluded that the first Lady Bird deed did not convey any interest to L until the death of both grantors, and RPC, as the conservator, did not violate any statutory duties but was entitled to execute a Lady Bird deed in fulfilling its fiduciary obligations to the protected individual, B.

Help with Probate Litigation

Aldrich Legal Services represents clients in a wide range of probate litigation matters including inheritance disputes. Given the emotional nature of these disputes and their financial impact on all involved, it is critical that anyone involved in such a dispute retain highly qualified legal counsel.

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