7 Michigan Rules That Decide Who Keeps the Cottage When a Parent Dies
Few families enjoy talking about what will happen to the family cottage before a parent passes away.
Michiganders may be surprised that the answer can hinge on paperwork nobody has looked at in years.
Here’s what can decide who ends up with your family cottage.
Note: This is general information, not legal or tax advice. Property tax, probate and ownership rules are subject to change.
1. Title at Death
When there’s a will, the person it names generally gets title to the cottage at death.
If your parent’s will leaves the cottage to a sibling, that sibling owns it from the day your parent dies.
Without a will, the cottage passes to your parent’s heirs.
That title stays subject to the rights of creditors and to administration.
2. No-Will Split
Who gets the cottage when your parent dies without a will is set by intestacy rules.
If your parent had no surviving spouse, the estate goes first to your parent’s descendants.
That means you and your siblings share the estate, with the children of a child who has died taking that child’s share.
The cottage is part of that estate, so a personal representative may be able to sell it.
When a spouse survives and every child is also the spouse’s child, the spouse takes a base figure of $150,000, adjusted for inflation, plus half of the balance.
Other family setups, such as children from another relationship, fall under different parts of the same statute.
3. Survivorship Rights
Survivorship rights in a deed pass a cottage to the surviving owner instead of through your parent’s will.
That works if your parent and a sibling hold title as joint tenants with full rights of survivorship, and Michigan Legal Help says the deed has to mention survivorship.
A deed conveying the cottage to your parent and your parent’s spouse at the same time makes them tenants by the entirety, and each has a survivorship right.
Michigan’s survival rule adds a wait of 120 hours.
An owner who can’t be shown to have outlived the other by that long is generally treated as having died first.
4. Ladybird Deeds
With a ladybird deed, your parent can keep control of the cottage and still decide who gets it.
Your parent can sell it without asking the person the deed names, according to the State Bar of Michigan’s journal.
If your parent doesn’t sell, title passes to that person at your parent’s death.
That transfer skips probate.
Two cases, In re Conservatorship of Greer and In re Estate of Rasmer, affirm the deed as a means to forgo probate.
If you’re the person the deed names, your creditors can make claims against your interest in the cottage.
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5. Heirs Property Buyouts
Under the heirs property law, co-owners of an inherited cottage can buy out a co-owner who asks a court to sell it.
The state added that law as Public Act 215 of 2024, effective April 2, 2025.
To count as heirs property, the cottage has to be held as tenants in common.
No written agreement binding all the co-owners can govern how it's partitioned.
At least one co-owner must have gotten title from a relative, living or dead.
It also takes one of three 20% thresholds.
Relatives hold 20% or more of the interests, a co-owner who got title from a relative holds that much, or relatives are 20% or more of the co-owners.
Any one will do.
If you're one of the other co-owners, you have 45 days after notice to decide whether to buy.
A court-ordered sale has to be an open-market sale, unless sealed bids or an auction serve the co-owners better, the judge finds.
6. Living Trusts
A cottage held in a revocable living trust is set up to be distributed after your parent dies, according to Michigan's Attorney General.
The State Tax Commission's guidelines treat a distribution from a trust as a transfer of ownership, with two exceptions.
One applies when you receive the cottage and you're also the trust's sole present beneficiary.
The other covers certain close relatives of the trust's settlor, as long as the cottage isn't used for any commercial purpose afterward.
7. Personal Representative's Power to Sell
Unless the will or a court order in a formal proceeding restricts it, a personal representative can sell your parent's cottage.
A personal representative may properly sell when acting reasonably for the benefit of interested persons.
A public administrator acting as personal representative needs court approval to sell the decedent's real estate.
Tax Foreclosure Clock
If you inherit a cottage with unpaid property tax, it can end up belonging to the government.
Michigan's foreclosure law forfeits property to the county treasurer on March 1 once its taxes have been delinquent for 12 months or more.
Forfeiture comes first.
A foreclosure judgment and a deadline to redeem follow.
In an uncontested case, absolute title goes to the county or state government that brought the foreclosure on the March 31 after the judgment, if you haven't redeemed the cottage.
In a contested case, the deadline is 21 days after the judgment.
Tax Bill After a Transfer
A cottage's tax bill starts with its taxable value, and a bigger bill can be harder for you to carry as an heir.
Michigan's property tax statute generally limits each year's rise in taxable value to 5% or the rate of inflation, whichever is lower.
After a transfer of ownership, the taxable value for the next calendar year is set at the state equalized valuation, the State Tax Commission's guidelines say.
Assessors set that valuation at 50% of the cottage's true cash value.
A conveyance under a will, or by a court when there's no will, also counts as a transfer of ownership, with exceptions.
The Math on a Cottage Reset
Here's what a transfer of ownership can do to your tax bill on an inherited cottage when no exception applies.
Say the cottage has a true cash value of $300,000, which makes its state equalized valuation $150,000.
Suppose the cap has held your parent's taxable value to $90,000.
After the transfer, the next year's taxable value becomes the full $150,000.
At $30 of tax for every $1,000 of taxable value, your bill goes from $2,700 to $4,500.
That's an $1,800 jump.
After that reset, the yearly cap on increases applies again to the new number until the next transfer of ownership.
Family Transfer Exemption
The family transfer exemption can keep a cottage your parent passes to you from counting as a transfer of ownership.
It applies to transfers beginning December 31, 2014, under Public Act 310 of 2014, the State Tax Commission says.
The exemption covers the owner's or the owner's spouse's parents, siblings and children, along with grandsons and granddaughters.
The one condition is that the cottage can't be used for any commercial purpose afterward.
The statute's definition of commercial purpose excludes renting the property for less than 15 days in a calendar year.
If you rent the cottage out for 15 days or more in a calendar year, the rental can count as a commercial purpose.
You file a Property Transfer Affidavit with the assessor within 45 days of the transfer.
If the assessor or Treasury asks for proof that the transfer qualifies, you have 30 days to send it.
You can face a $200 fine.
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