The Immortal Deed: How to turn your farm into a lottery prize.

It sounds like the plot of a old-time whodunit. Three people are given a deed to an estate, but none of them get to really control the property until all but one have died. Who will survive? Who will win? Did Aunt Millie really fall off that cliff accidentally?

Obviously this is just fiction, except that in Michigan it's not quite. Our state is one of the rare states that lets you deed property to a group of people, with the last living person receiving the whole property. And, you can never undo this!

It's called joint tenancy with full rights of survivorship. Other states have deeds with the same name, and in some ways they all work the same there as in Michigan. The purpose of this type of deed is to have land pass automatically to the the remaining people (joint tenants) in the group as any tenants die. The last one living gets the whole property.

In most states each of the people on the deed (the joint tenants) can break the joint tenancy at any time by selling their share (usually a percentage of the value of the property) to another person. This breaks the automatic-passing-on-death to the other joint tenants. Instead, this turns the ownership into something called a tenancy-in-common, where multiple people own the whole property, but on death their share goes to their heirs, and not to the other tenants.

In Michigan, though, the joint tenants can never break the joint tenancy. In fact, they don't even really own anything of much value that they could sell, either! That's because all the joint tenants have in Michigan is really a life estate (the right to live on and use the land during their own life) with the possibility of having full ownership if they outlive all the other joint tenants.

What happens if you are one of the joint tenants in a situation like this in Michigan, and you decide to sell your share to someone else? All they get is a life estate during your life, and the right to full ownership only if you outlive everyone else.

What does this mean for you as a farmer?

First, it means that if you were thinking of doing this as a way to pass on ownership to your children or someone else, you would be giving away your ability to ever sell or mortgage this land during your lifetime. You would have a hard time convincing a bank or a buyer to give you money for something that only exists as long as you live. And you could never change your mind about this. If you decide that the person you added to the deed doesn't deserve the whole farm, it would be impossible to ever undo, unless you're able to outlive them.

Second, if you're looking to buy land, you need to be aware of deed that the seller of the land has, and who else might be on it. For people coming from outside of Michigan, they might not be aware that they're stepping into a mess.

Having good legal advice anytime you're looking at buying, selling, or passing on land would help you avoid this problem, and other problems that can happen with unexpected outcomes in the law.