One of the most dangerous things I see, and one of the documents I often have to correct when people try to do it themselves, is when they try to do a deed. Maybe they've downloaded a DIY will from a mail-merging website and they've decided that they want to add a deed to their estate planning documents. There can be a lot of forms for deeds online, and not knowing which one to choose can create a problem for you.
People will ask me, Why is it so dangerous? Why is it such a risk to create a deed on my own? The reason is that you need to make sure that everything is done correctly. This isn't something that if there's a small error that somebody has to fix later on, it's just going to be an easy fix. It can be a very important problem. If you've put the wrong person's name or you've left off the magic language that's needed on the deed to actually do what you want that deed to do, it may not be easily fixable.
Common Issues with Deeds
There are a few common issues I see with deeds when they come to me as part of an estate plan or if somebody has died and the family is stuck in Probate Court.
- Consistent Name ~ The first issue I often see is that the you need to make sure that the name has stayed consistent between the deeds. So my name is Andrew Ayers and that's what's written on the deed, and I'm transferring it to a new party, and I'm still gonna hold an ownership interest, it can't then say "Andy Ayers" or "Andrew J. Ayers" or something else, it needs to say "Andrew Ayers" the same thing it said on the original deed. Oftentimes when you're preparing these things on your own, you may not have actually looked at the exact way the deed is held and you may miss out on the language that needs to be there.
- Ownership Interest ~ A very important provision is how are you owning the property. So if you and your wife own property together as Joint Tenants with Right of Survivorship, you need to make sure that any deed in the future has that same type of language. Now, if we're going to be talking about a cabin you own with your sister, that may be a little bit different. You may not want that right of survivorship anymore, and you want your share to be able to go to your family and her share to go to her family. In that case, there's different language than just Joint Tenants with Right of Survivorship and you need to make sure that language is correct. And it's especially important if you're going to move this property into either a trust or an LLC that we had the right language on that deed. You don't want to mess up that transfer and leave a big mess for somebody down the road.
Now you're probably thinking what kind of mess can I really leave? It's just a deed and if it says somebody's name, and it's pretty much the right thing, why would I have a problem? Well, if you don't have the exact language, if things aren't correctly stated in your deed, your deed and your estate are going to end up in Probate Court where a judge is going to have to sort all this out.
The common probate issues I see on deeds are when you have a trust or an LLC that we've created for the property to avoid being into the Probate Court, but now there's a problem with that deed and the property actually ends up in Probate Court. You've now got an expensive legal case to sort out what's going on with that property.
Also, if you're going to use something called a Transfer on Death Deed, a special type of deed in some states that allows you to essentially give your property by a beneficiary designation to somebody else, if it's done correctly, that property doesn't go through your local Probate Court. However, if it's done incorrectly, that property could now end up in your estate, and we have to use your will to distribute that property and it may not end up with the people that you initially intended to end up with.
Finally, if you have the joint owners, and when you decide between the right of survivorship or just joint owners who have their own separate chairs, oftentimes when you have married couples, we want to make sure that we have Joint Tenants with Right of Survivorship, or if we have family members, let's say seven of us own a cabin, do we want the Right of Survivorship for each person share? Or do I just keep it in the family and the last sibling alive inherits the property. Those are two very different deeds and you need to make sure you have the right language for what you and your family intend to do.
Hopefully you see this is not something I'm going to recommend you do yourself. Instead, your next steps are reach out to a professional, meet with an attorney, go over the deed that you currently have and what you want to do with the property to make sure it's done correctly. If you're ready to talk to an attorney you can set up a Legal Strategy Session. It's usually a 15 or 20-minute phone call where we can go through your current options, see where you are and give you the best next steps forward.