Preparing Your Own Deed May Cause Problems Down the Line

It is not uncommon for individuals to use a deed form purchased at a stationary store or, increasingly, an online legal website. While these forms may meet the requirements for a deed under Oregon law, all too often the person preparing the deed completes the form incorrectly. There are a lot of mistakes you can make; some of the most common include: (1) incorrectly identifying the grantor(s) and grantee(s); (2) incorrect conveyancing language; and (3) mistakes in the legal description. You can’t rely on the county recorder to catch the mistakes, so the mistakes usually come to light when you go to sell the property, visit an attorney for estate planning, or start to administer a deceased person’s estate.

For example, I recently sat down with a widow to discuss the probate of her husband’s estate. She and her spouse owned a piece of land that they had purchased from friends without using a title company in 1999. The conveyance read: “John Smith and Mary Smith, husband and wife, Grantors convey . . . to Mike Jones and Mary Jones.” Can you see what is missing? The person who prepared the deed, a form purchased at a stationary store, forgot to add the phrase “husband and wife” after the Jones’ names.

If the deed had been prepared after 2007, this would not be a problem. In part because of situations like the one described above, ORS 93.180 was changed so that a conveyance to two persons who are married is presumed to be a tenancy by the entirety even if the preparer forgot to include either the phrase “husband and wife” or “as tenants by the entirety.” When a married couple owns property as tenants by the entirety, a deceased spouse’s interest passes automatically to the surviving spouse without the need for a probate proceeding.

Before the law changed, the law presumed that the ownership was as tenants in common, which requires some form of probate proceeding to transfer ownership. So, Mrs. Jones is presumed to own the property 50/50 with her husband’s estate. Because of the high value of the property, the missing phrase will cost Mrs. Jones at least $3,000.

Another mistake my colleagues and I often run across is the use of the phrase “joint tenants with right of survivorship.” Unfortunately, while that language is acceptable in other states, it is not used in Oregon. Different language must be used to create a survivorship between two persons who are not married.

These are just a few examples of the mistakes that a person who is not trained in the preparation of deeds can make. Your real property usually comprises a major part of your assets. Why risk inadvertently messing up the title to the property?