Sell Inherited Property in Michigan

• Michigan has no estate tax and no inheritance tax for modern deaths. Selling inherited property creates no state-level death tax. Only federal capital gains can apply, and only on gain above the stepped-up basis.
• Property tax is the real cost surprise, not a death tax. A transfer at death can “uncap” a home’s taxable value under Proposal A and raise the annual bill, though a transfer to a qualifying relative who keeps the home in residential use can avoid uncapping.
• A 2024 law opened a small-estate path for real property. For 2026 deaths, a qualifying estate of $53,000 or less can transfer real estate through a Petition and Order for Assignment, and you subtract the mortgage on the home (up to $264,000) when sizing the estate.
• Michigan has no statutory transfer-on-death deed. Families use the Lady Bird (enhanced life estate) deed instead to pass a home at death without probate, which also keeps it outside Medicaid estate recovery.
• A personal representative can usually sell before probate closes. As long as the Letters of Authority are not restricted, the personal representative can list and sell estate real estate during administration.

Selling inherited property in Michigan depends on how title was held, whether probate is required, whether a small-estate assignment is available, and whether Michigan-specific issues like Proposal A property-tax uncapping, Lady Bird deeds, or Medicaid estate recovery affect the sale.

Whether inherited property in Michigan requires probate depends first on how title was held, then on the size of the estate, whether a small-estate shortcut is available, whether there are creditor claims, and whether anyone disputes who can sell. Property that passed through a survivorship deed, a Lady Bird deed, or a trust transfers outside probate. Solely titled property, and a deceased co-owner’s share of a tenancy in common, generally requires probate or one of the alternatives in the transfer-paths section below.

• Tenancy by the entirety (married couples): No probate. Passes to the surviving spouse automatically by operation of law.
• Joint tenancy with right of survivorship: No probate. Passes to the surviving joint owner, if the deed actually states survivorship.
• Lady Bird (enhanced life estate) deed: No probate. Passes to the named beneficiary after the death is recorded.
• Revocable trust: No probate. Distributed by the successor trustee under the trust terms.
• Sole ownership: Probate, or a small-estate assignment if the estate qualifies. Passes by will or intestacy and needs authority to clear title.
• Tenancy in common: Probate, or a small-estate assignment, for the deceased owner’s share. There is no survivorship, so that share passes through the estate even though the other owners are still alive.
• Unknown or unclear title: Start with a title search. You cannot plan a transfer until you know how the property is actually held.

Probate avoidance does not automatically mean the property is ready to sell. Even when a home passes outside probate, the title company still has to confirm who can sign and whether taxes, a mortgage, insurance, or estate claims affect the closing.

Michigan is a common-law (separate property) state, not a community property state, with no estate tax and no inheritance tax for modern deaths. Inherited estates are governed by the Estates and Protected Individuals Code (EPIC), at MCL 700.1101 and following, and administered through the probate court in the county where the decedent lived or where the property sits, from Wayne County and Oakland County in the southeast to Kent County around Grand Rapids and the rural counties of northern Michigan and the Upper Peninsula. Its defining feature for inherited real estate is not a death tax but a property tax mechanic: a transfer at death can reset a home’s taxable value under Proposal A, and a missed exemption or deadline can raise the annual bill sharply.

Michigan has three mechanics that distinguish it from most other states for inherited real estate: Proposal A property-tax uncapping, a 2024 small-estate path that now reaches real property, and heavy reliance on the Lady Bird deed in place of a transfer-on-death deed.

How Does Proposal A Uncapping Affect an Inherited Michigan Home?

A transfer at death can “uncap” a Michigan home’s taxable value and raise the annual property tax, but a qualifying family transfer can prevent it. Michigan caps how much taxable value can rise each year while the same owner holds the property; a transfer of ownership, including an inheritance, can reset that value upward toward the home’s State Equalized Value under the General Property Tax Act (MCL 211.27a). The key relief is an exemption for a transfer to a qualifying close relative where the property is not used for a commercial purpose afterward. A separate 45-day filing and the risk of losing the Principal Residence Exemption are covered in the tax section.

Why Does Michigan’s 2024 Small-Estate Change Matter?

A 2024 change to EPIC (2024 PA 1, effective February 21, 2024) lets a qualifying smaller estate transfer real property through a Petition and Order for Assignment. For 2026 deaths the threshold is $53,000, and when sizing the estate you subtract the mortgage secured by the home, up to a $264,000 cap (MCL 700.3982). This opened a faster path that did not exist before for many inherited homes. It carries a trap, though: this simplified path distributes property under Michigan’s intestacy rules, which may not match what a will says.

Why Are Lady Bird Deeds So Common in Michigan?

Michigan does not have a statutory transfer-on-death deed, so families use the Lady Bird (enhanced life estate) deed to pass a home at death without probate. The owner keeps full control during life, including the right to sell, mortgage, or revoke without the beneficiary’s consent, and the property passes automatically at death. It also connects to Medicaid: because Michigan recovers Medicaid costs only from assets that pass through probate, a home that validly transfers by Lady Bird deed is generally not part of the probate estate used for recovery. For the general mechanics of keeping a home out of probate, see our guide to how to avoid probate on inherited property.

Michigan recognizes several forms of ownership that determine whether inherited property passes through probate. Married couples most often hold their home as tenancy by the entirety, which passes automatically to the surviving spouse, while several other arrangements either skip probate or require it before anyone can sell.

One Michigan caution sits outside the title rules: when a home passes by Lady Bird deed, the deceased owner is usually still the named insured on the homeowner’s policy, and a standard policy may not automatically cover the new beneficiary-owner. A loss in the gap between the death and reissuing the policy may not be covered, so the beneficiary should review the policy’s death-of-named-insured clause and notify the insurer promptly. For how coverage and the death-of-named-insured gap work after an owner dies, see our guide to inherited property insurance. This is an insurance issue, not a Michigan legal rule.

When someone dies without a will in Michigan, the surviving spouse’s share depends on who else survives the decedent, and the dollar figures are set by statute and adjusted each year for inflation. These figures are the 2026 amounts certified by the Michigan Department of Treasury (MCL 700.2102). These rules also control when a small-estate assignment is used, because that path distributes property by intestacy even when a will exists.

Notice the drop in the last row: when none of the decedent’s surviving children are also the spouse’s children, the guaranteed amount off the top falls by $100,000, from $301,000 to $201,000, which can meaningfully change who gets what in a blended family. If there is no surviving spouse, the estate passes to the decedent’s descendants, then parents, then the descendants of the decedent’s parents (siblings, then nieces and nephews), and only escheats to the state if no eligible relative can be found (MCL 700.2103). Several Michigan rules sit on top of these formulas: the state divides shares per capita at each generation (MCL 700.2106), so grandchildren in the same generation are treated equally even when the family branches are different sizes; an heir must survive the decedent by at least 120 hours to inherit (MCL 700.2104); and a half-sibling inherits the same as a full sibling (MCL 700.2107). For how intestate succession and the probate process work as concepts, see our guide to probate and real estate.

Most uncontested Michigan estates use informal probate, where the probate register, not a judge, issues Letters of Authority, often within days or a few weeks of a complete filing depending on the county. From there, the earliest an estate can usually close is about five months, because Michigan gives creditors a four-month window to present claims. Contested or complicated estates take longer.

Michigan offers more than one track:

1. Informal probate. The workhorse for uncontested estates. The register issues Letters of Authority, the personal representative has broad independent authority to manage and sell estate property, and there is usually no hearing unless someone objects.
2. Formal probate. Used for a will contest, ambiguous or disputed heirship, hostile heirs, or multiple wills. It is heard by a probate judge with notice to all interested persons.
3. Supervised administration. The most court-controlled option, where the judge oversees distributions and major actions, reserved for high-conflict estates and slower and costlier than the others.

A personal representative must notify heirs and devisees of the appointment, with the timing set by both statute and court rule: Michigan Court Rule 5.304 calls for notice within 14 days after appointment, while MCL 700.3705 sets a 28-day statutory period and governs what the notice must contain. Creditors generally have four months from published notice to present claims, and the estate can usually close no earlier than five months after the personal representative is appointed. Beyond attorney fees, the probate court charges a graduated inventory fee based on the value of the inventoried estate under MCL 600.871; if that fee would be a genuine hardship, the court may reduce or waive it on petition under MCL 600.880b, an option many heirs never hear about.

The fastest way to transfer an inherited Michigan home is a Lady Bird deed or trust the owner set up before death. After death, the main shortcut for real estate is the Petition and Order for Assignment, which a 2024 law made far more useful. The right path depends on the size of the estate, how the property was titled, and whether there is a will.

Three points drive most Michigan questions about the simplified path. First, the Petition and Order for Assignment (Form PC 556) is the small-estate tool that can include real property: for 2026 deaths the gross estate must be $53,000 or less, and you subtract the mortgage secured by the home (up to $264,000) when sizing it, so a heavily mortgaged home can fit under the limit even when its market value is much higher. Second, that path distributes by intestacy, not by the will, so using it can produce a different result than the will directs; when honoring a will matters and the estate is near the threshold, full probate may be the better choice. Third, the Transfer by Affidavit (Form PC 598) is for personal property only and cannot transfer real estate, so it is not part of the pathway for selling an inherited home. One more practical note: not every inherited “home” is deeded real property, and a mobile or manufactured home not affixed to the land may transfer through a Michigan Secretary of State title process rather than a deed.

A surviving spouse in Michigan is entitled to several cash allowances on top of whatever they inherit, and has a limited right to claim a share even when a will leaves them out. The 2026 allowance amounts certified by the Michigan Department of Treasury are a homestead allowance of $30,000 (MCL 700.2402), which despite its name is a cash entitlement and not the house itself; exempt property of $20,000 (MCL 700.2404) in furniture, appliances, automobiles, and personal effects; and a family allowance of $36,000 as a lump sum or reasonable periodic payments (MCL 700.2405). Together these total roughly $86,000 that can come off the top before unsecured creditors are paid.

Michigan’s protection against being disinherited by a will is narrower than in many states. Under MCL 700.2202, a surviving spouse can elect to take one-half of what they would have received under intestacy, reduced by one-half of the property the spouse already receives outside the will (for example through joint ownership or beneficiary designations). This is narrower than the “augmented estate” systems used in many states because it does not reach back to capture everything the decedent moved out of the probate estate during life. The deadline is strict: the spouse generally must elect within 63 days after the later of the claims deadline or service of the inventory, and the personal representative must notify the spouse of this right within 28 days of appointment (MCL 700.3705(5)). Some online sources state much longer deadlines borrowed from other states; a 9-month or 6-month figure does not apply in Michigan.

Michigan also no longer gives a surviving spouse an automatic life estate in the deceased spouse’s real property. Dower was abolished effective April 6, 2017 (MCL 558.30), and a surviving spouse of either gender no longer has any automatic life estate in the other spouse’s land.

Does Michigan Have an Estate or Inheritance Tax?

Michigan has no estate tax and no inheritance tax for any modern death. The old inheritance tax was repealed and applies only to deaths on or before September 30, 1993, and the estate “pickup tax” ended when the federal credit it relied on was phased out years ago. Federal estate tax is separate from Michigan law and reaches only very large estates, so the large majority of Michigan estates owe no death tax of any kind.

What Is the Capital Gains Tax on Inherited Property in Michigan?

Inherited Michigan property generally receives a stepped-up federal basis to its fair market value at the date of death, so Michigan income tax usually applies only to gain above that value if the property later sells for more. There is no separate Michigan inheritance or estate tax to add on top. This page covers the Michigan-level treatment only; for how the federal stepped-up basis works and how to calculate gain on a sale, see our guide to capital gains tax on inherited property. Two mortgage points often confuse heirs: under the federal Garn-St. Germain Act, a lender generally cannot call an inherited owner-occupied mortgage due simply because the home passed to a relative at death, though that does not erase missed payments, apply the same way to reverse mortgages, or guarantee every nonrelative or investment-property heir can keep the loan unchanged; and a reverse mortgage runs on a much shorter clock, typically requiring the heirs to notify the servicer within about 30 days and resolve the loan within a limited number of months.

Does Inheriting Property in Michigan Trigger a Property Tax Increase?

It can, through Proposal A “uncapping,” but a qualifying family transfer often prevents it. Four separate ideas are easy to confuse:

• Uncapping changes the taxable value. Michigan caps how much a property’s taxable value can rise each year while the same owner holds it; a transfer of ownership, including an inheritance, can reset that value upward toward the State Equalized Value, which is tied to market value.
• The Principal Residence Exemption (PRE) changes the tax rate, not the taxable value. A home occupied by its owner as a principal residence pays a lower rate, and a home an heir does not occupy as a principal residence can lose the PRE.
• The Property Transfer Affidavit (Form L-4260) is a reporting deadline. It must be filed with the local assessor within 45 days of the transfer. It goes to the assessing office; it is not a deed recorded with the register of deeds.
• The family exemption depends on the relationship and use. A transfer to a qualifying relative is exempt from uncapping when the property is not used for a commercial purpose afterward, not merely because a form was filed.

Michigan’s transfer-affidavit form identifies specific qualifying relationships, including a parent, child, sibling, adopted child, grandchild, and certain spouse-related transfers, so the exact list should be checked on the current form rather than assumed from a “first-degree” label. As a worked example, a long-held suburban Oakland County home with a true cash value near $400,000 might have a taxable value of only about $80,000 because the same owner held it for years; if it passes to a child who keeps it residential and the exemption applies, that low taxable value can carry over, but if the heir does not qualify or does not occupy it as a principal residence, the taxable value can jump toward the State Equalized Value and the bill can rise by thousands of dollars in a single year. On transfer tax, a personal representative’s transfer of the home to an heir for no payment is generally exempt, and a court-ordered assignment to heirs for no payment is generally exempt, but a genuine sale by the estate or a buyout where one heir pays the others can be taxable, and a sale to a child or sibling is not automatically exempt just because the buyer is family. If you inherit farmland, timber land, or forest property, separate Qualified Agricultural or Qualified Forest classifications can preserve favorable treatment but require affirmative steps within set windows, which matters for rural land in northern Michigan and the Upper Peninsula.

To sell an inherited Michigan home, the title company needs proof of who has legal authority to sign the deed, and that proof depends on how the property is passing. The signer is the personal representative for a probated estate (using Letters of Authority and a personal representative’s deed), the successor trustee for trust property (with a certificate of trust), the surviving owner for survivorship property (after recording proof of death), or the named beneficiary for a Lady Bird deed (once the death is recorded). A typical closing package includes the death certificate, the signer’s authority document, the correct deed, a Property Transfer Affidavit filed with the local assessor, a transfer-tax exemption statement on the deed where it qualifies, and resolution of any Medicaid estate recovery claim. For the full set an heir should gather before listing, see our guide to the documents you need to sell inherited property.

A few Michigan-specific points control whether a sale can actually close:

• A personal representative can usually sell before probate closes, if authority is not restricted. A personal representative with unrestricted Letters of Authority generally has independent power to list and sell estate real estate during administration. But a will, a court order, supervised administration, or “restricted” Letters can require court approval first, and a state or county public administrator generally needs court approval to sell real property. Restricted Letters can block a closing without that approval. For everything the role involves from appointment to closing, see our guide to what a personal representative needs to do to sell inherited property.
• Title issues stall more inherited sales than anything else. The most common problems are an old owner still on the deed, a missing death certificate, unclear survivorship language, restricted Letters, an unresolved tax foreclosure (common with delinquent Wayne County parcels), an unfiled Property Transfer Affidavit, an open Medicaid estate recovery claim, and co-heirs who do not agree.

How Does Medicaid Estate Recovery Affect an Inherited Michigan Home?

Because Michigan’s estate recovery program is based on the probate estate, property that validly bypasses probate, through a trust, tenancy by the entirety, joint tenancy, or a Lady Bird deed, is generally not part of the estate used for recovery. This is a major reason Lady Bird deeds and trusts are so common in Michigan. Several exemptions apply even when a home does pass through probate, including while a surviving spouse is alive, while a child under 21 or a blind or disabled child is alive, for a home occupied by certain family members, and for a child who lived in the home and provided care that delayed the parent’s move to a nursing facility. An adult child who inherits a parent’s home through probate, where the parent received Medicaid long-term care, can face a recovery claim against the home’s value. This page covers the Michigan-specific picture; for how recovery works in general, see our guide to whether Medicaid can take an inherited house.

Out-of-state heirs selling Michigan property usually need some form of Michigan-recognized authority before they can transfer the property, even when the main probate is happening in the state where the person lived. Michigan real estate is transferred under Michigan law, so an out-of-state estate generally cannot convey a Michigan home, cottage, or parcel of land without a Michigan step, filed in the county where the property sits, whether that is a Wayne County house, an Oakland County condo, or a Grand Traverse County cottage. Michigan does not always require a separate full probate: when no Michigan administration is pending, a personal representative already appointed in the home state can often file authenticated copies of their appointment papers and then act in Michigan, which is faster than opening a new probate. A full Michigan ancillary probate may be needed when there is no usable out-of-state appointment, a dispute exists, or that streamlined route does not fit.

One Michigan limitation surprises many surviving spouses: Michigan’s spousal allowances and elective share are primarily tied to a decedent who lived in Michigan, so if the decedent lived elsewhere but owned Michigan real estate, the home state’s estate law may control the spouse’s protections rather than Michigan’s. Out-of-state heirs of Detroit and Wayne County property also face two added risks: many Detroit homes are occupied by family of deceased owners whose names were never cleared from title, which blocks selling, refinancing, or insuring until it is resolved; and Wayne County’s tax-foreclosure timelines can move faster than heirs expect, so a home with unpaid taxes can be at risk before the estate is even finished. For the general mechanics of probating an estate across state lines, see our guide to ancillary probate.

When a Michigan home passes to several heirs who cannot agree, any co-owner can ask a court to force a sale through a partition action, but a court-ordered sale usually brings less than a normal market sale would. Siblings who inherit a home together typically hold it as tenants in common, each owning an undivided share, so no one can force the others to sell informally and no one is required to keep paying for a property they want to sell. Any co-owner may file a partition action in the circuit court for the county where the property sits, and the court can either divide the property physically (partition in kind, rarely practical for a single-family home) or order a sale and divide the proceeds (partition by sale, the usual outcome for a house). A contested partition action is slow and expensive, often taking many months to well over a year and running into significant legal fees, and a court-ordered or sheriff’s sale frequently brings less than the home would fetch on the open market.

Michigan has not adopted the Uniform Partition of Heirs’ Property Act that some states use to give co-heirs a right to buy out the person seeking a sale before any auction, so the risk of a below-market court sale is real, which is one more reason to reach a voluntary agreement when you can. A common, difficult version of this is when one heir lives in the inherited home and does not want to sell while the others do, and the occupant is not paying rent or upkeep that reflects the others’ shares. The cleaner solution is usually a negotiated buyout or a voluntary sale rather than a partition action. For how a forced sale works as a concept and how co-owners navigate one, see our guide to whether a sibling can force the sale of inherited property.

Common mistakes heirs see online about inherited property in Michigan include the following. Each correction is stated against current Michigan law.

• Some sources state that Michigan has a transfer-on-death or beneficiary deed for real estate. It does not; Michigan has no statutory TOD deed, and families use the Lady Bird (enhanced life estate) deed to pass a home at death without probate.
• Some sources cite a small-estate limit of a few thousand dollars from years ago. For 2026 deaths, the Petition and Order for Assignment threshold is $53,000, with a $264,000 mortgage lien-deduction cap (MCL 700.3982), and the figures adjust annually.
• Some sources state that solely owned real estate always requires full probate. It does not since 2024 PA 1; a qualifying smaller estate that includes real property may use the Petition and Order for Assignment instead of full administration.
• Some sources state that heirs must wait until probate closes to list the home. Usually false; a personal representative with unrestricted authority can generally list and sell estate real estate during administration, with restricted Letters, supervised administration, and public-administrator estates as the exceptions.
• Some sources state that family transfers are always exempt from real estate transfer tax. It depends; a no-payment transfer at death is generally exempt, but an actual sale by the estate or a sibling buyout for value can be taxable.

• No enacted 2025 or 2026 Michigan law has materially changed how EPIC treats inherited real estate as of mid-2026. The page reflects current 2026 rules.
• 2024 PA 1 remains the most important recent enacted change. Effective February 21, 2024, it expanded the Petition and Order for Assignment to include real property and reset the small-estate dollar figures.
• The 2026 inflation adjustments to EPIC’s dollar figures took effect at the start of 2026 and are certified each January by the Michigan Department of Treasury, including the $53,000 assignment threshold, the $264,000 lien-deduction cap, and the spousal allowance amounts.
• House Bill 4233 (pending, not law). This bill would restrict certain foreign persons and entities from acquiring or holding Michigan agricultural land, which could affect inherited farmland passing to a foreign heir. It passed the Michigan House in May 2025 and remained in the Senate Committee on Government Operations as of mid-2026.
• Proposal A uncapping reform is proposed from time to time and would matter more to inherited property than almost any other change, so it is worth monitoring, but none has advanced.