Ladybird Deeds in Michigan

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See Michigan Title Standard 9.3.

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Here’s a 2002 case not directly on point, but the legal argument is the same—conclusion is that MI favors immediate vesting when possible—vested remainder subject to divestment (or defeasance, as they say.)

Zadra v Marshall, Aug 23, 2002. 2002 WL 1963715 (unpublished, Court of Appeals of Michigan) . . . Under the rules of construction, a vested interest is one that is capable of becoming possessory immediately on the expiration of the preceding estate. In re Childress Trust, 194 Mich.App. 319, 322-323, 486 N.W.2d 141 (1992); Stevens Mineral Co. v. Michigan, 164 Mich.App. 692, 696, 418 N.W.2d 130 (1987).

Even when a remainderman may not take because he predeceases the preceding estate, this type of an interest is termed a vested remainder interest subject to defeasance rather than a contingent remainder. In re Jamieson Estate, 374 Mich. 231, 236, 132 N.W.2d 1 (1965); In re Childress Trust, supra. Additionally,

A remainder interest that becomes possessory upon the death of the lifetime beneficiary is vested even if the holder of the life interest may invade the principal and has discretion to exhaust the corpus. Broas v. Broas, 153 Mich.App. 310, 311-312, 116 N.W. 1077 (1908). Where the trust provides that the trustee may invade the entire corpus of the estate if necessary to support and provide medical care for the income beneficiary, the persons named as being entitled to the corpus upon the death of the income beneficiary have a vested remainder interest in the corpus of the trust subject to defeasance if the entire corpus is used as described. Glaser's Elevator & Lumber Co. v. Lee Homes, Inc. 65 Mich.App. 328, 331, 237 N.W.2d 312 (1975). [In re Childress Trust, supra at 323, 486 N.W.2d 141.]

Moreover, Michigan favors early vesting of estates and ambiguities in the will or trust are to be read to create such a vested interest. See, e.g., In re Jamieson Estate, supra at 237-238, 132 N.W.2d 1; In re Hurd's Estate, 303 Mich. 504, 509-512, 6 N.W.2d 758 (1942); In re Shumway's Estate, 194 Mich. 245, 253-254, 160 N.W. 595 (1916).