We know that it can be tempting to file your own deed with the clerk and recorder. It’s inexpensive and deceptively easy. However, like the classic saying, “just because you can, doesn’t mean you should.”Let’s start first with chain of title.
What is the chain of title?
Chain of title is public record that identifies the buyer (grantee) and the seller (grantor) of any property. It ensures that someone who has never been a buyer of the property can never be a seller of the property.
So, how can recording your own deeds affect chain of title?
Example 1: Husband purchases a property in his sole name. A few months later, Husband hears that probate will not be required so long as he quitclaims Wife onto the property. Seems easy enough! Except . . . Husband filed a quitclaim deed that named him and Wife as tenants in common. What does that mean? It means that if Husband died, his 50% share in the property would have to go through probate before it could transfer into Wife’s name. Instead of hiring an attorney to transfer title properly, Wife must now pay thousands to get it transferred through the probate process.
Example 2: Woman purchases a property in her trust name. However, when it’s time to refinance, the bank requires the property to be transferred out of the trust name and placed into Woman’s name. Woman quitclaims the property out of the trust and into her name. Once the title company refinances her loan, she quitclaims the property back into her trust name. Except . . . Woman did not use the proper legal description and now the deed is invalid. So, instead of the property being owned by her trust and avoiding probate, the property is in her name – and her children are forced to open a probate to transfer the property back into her trust.
Example 3: Man quitclaims his property in and out of his trust more than 15 times. As we are sure you can imagine, there were many issues found within the chain of title. The legal description was inaccurate in a few different deeds, the grantors did not match the previous grantees. So many issues were found in fact, that the title company required a $500 report just to review which deeds were valid and which deeds were not. This report was needed before the property could be properly transferred to the trust.
What have we learned from these examples?
It is much better to invest in your estate plan now, so that your loved ones do not have to pay a whole lot more later. We have seen countless clients cause an immense amount of damage recording their own deeds. Don’t be one of them!
Schedule a meeting with one of our experienced attorneys to learn more today!