In my 22 years as a financial planner, I’ve reviewed retirement plans for hundreds of Michigan families. And I’ve noticed something troubling: the planning almost always stops at the investment accounts. Asset allocation, withdrawal strategies, Social Security timing, Roth conversions — all meticulously planned. But the house? It usually just sits there in the plan like an afterthought.
The Biggest Asset Most Families Have
For the typical Michigan retiree, the family home represents 40-60% of their net worth. It’s often larger than their 401(k), their IRA, and their savings account combined. And yet, when I ask clients what their plan is for the home upon their death, the most common answer is: “It’s in my will.”
A will sends the home through probate. Probate in Michigan takes a minimum of five months — and usually closer to a year. During that time, the home is tied up in court proceedings. The family can’t easily sell it. Property taxes, insurance, and maintenance continue to drain the estate. Attorney fees and court costs eat away at value.
Industry estimates put probate costs at 3-8% of the estate’s value. On a $300,000 home, that’s anywhere from $9,000 to $24,000 in costs — money that doesn’t go to the heirs.
Why This Is a Financial Planning Problem
As financial planners, we spend hours optimizing a client’s portfolio to capture an extra 0.5% of annual return. We agonize over expense ratios on mutual funds. We model Monte Carlo simulations of retirement withdrawal rates.
And then we ignore a planning decision that can cost the family 3-8% of their largest asset at death. It’s intellectually inconsistent. If we’re serious about maximizing the wealth a client passes to their heirs, we have to address the probate question for the family home.
Three Options, One Usually Winner
There are essentially three ways to avoid probate on a family home in Michigan:
Option one: Joint ownership with rights of survivorship. This works for married couples during the first death but fails at the second death. It also creates complications with capital gains, gift tax exposure, and loss of control if a child is added to title.
Option two: A revocable living trust. This is an excellent tool but requires retitling the home into the trust, paying attorney fees for the trust itself (typically $1,500-$3,500), and managing the trust during the client’s lifetime. For families with significant non-home assets, this is usually the right answer.
Option three: An enhanced life estate deed. For families whose estate planning complexity begins and ends with the home, this is often the most cost-effective solution. It accomplishes the same probate avoidance as a trust, for a fraction of the cost, without requiring retitling or ongoing management.
When I Recommend It to Clients
My typical use case: a single Michigan homeowner (widowed or single), age 65+, with a paid-off home, one or two adult children, and a straightforward estate plan. For this client, a basic will plus an enhanced life estate deed plus updated beneficiary designations on retirement accounts usually covers 95% of their planning needs.
Total cost for this package from a good attorney? Usually under $1,000. Compared to a full trust-based plan at $2,500-$4,000, it’s a meaningful savings — and the planning outcome for this type of client is essentially identical.
I don’t recommend this approach for blended families, clients with minor children, clients with significant non-home assets, or clients with complex gifting strategies. In those cases, the trust is the right answer. But for the typical middle-market Michigan retiree? The enhanced deed deserves consideration.
The Coordination Problem
One mistake I see regularly: clients execute the deed but fail to coordinate it with the rest of their estate plan. For example, they name a beneficiary on the deed, but their will leaves the home to someone else. The deed controls — the will is effectively overridden for that asset — but the contradiction creates family conflict and potential litigation.
Any time a client executes a deed like this, the entire estate plan needs to be reviewed for consistency. The will should be updated. Beneficiary designations on other assets should reflect the overall intent. This is where working with a coordinated team — financial planner plus estate attorney — pays dividends.
The Conversation I Have With Clients
Toward the end of my annual reviews with clients age 60 and up, I now ask: “What’s the plan for the house when the time comes?” If the answer involves probate, I send them to an estate planning attorney. Specifically, I refer clients who need a lady bird deed michigan to a firm that handles these every week — the execution details matter, and DIY deeds frequently contain errors that don’t surface until it’s too late.
The return on this conversation, measured in dollars preserved for the client’s heirs, usually exceeds the annual fee I charge. That’s the kind of planning that earns trust.
Closing Thought
Financial planning isn’t just about growing wealth. It’s about preserving it — through life transitions, through market downturns, and through the final transfer to the next generation. The enhanced life estate deed is a small tool with a big impact, and it belongs in the planning toolkit for the right clients.
If you haven’t had this conversation with your own advisor, consider raising it. The cost of the conversation is zero. The cost of skipping it can be enormous.
