I was recently given a copy of an affidavit that raised an interesting topic for discussion.  Where a deed is signed by an attorney-in-fact, but no power of attorney was ever recorded, can the matter be cleared up by an affidavit?  This post will focus on Ohio law, but other states most likely have similar laws in this regard.  I'd be interested in hearing thoughts from anyone on what they think and how your state laws may deal with the situation.

The affiant states:

1. I am an attorney licensed to practice law in the State of Ohio.
2. On May 26, 2004, I prepared a Deed for execution by John Doe and Jane Doe, husband and wife, Grantors to John Doe, Grantee.  John Doe signed said Deed as Attorney-in-Fact for Jane Doe.
3. That due to an oversight, no Power of Attorney was recorded with the Deed.
4. That on the 18th day of April, 2005, John Doe executed a Transfer of Death Deed naming his children Able Doe, Betty Doe, and Chad Doe as Transfer on Death Beneficiaries.
5. That upon John Doe's passing, an Affidavit of Transfer was filed on the 12th day of August, 2009.
6. Due to the oversight with regard to the filing of a Power of Attorney, the purpose of this Affidavit is to state that Jane Doe's interest in the real estate located at 123 Main Street, Anytown, Ohio would have transferred to John Doe, her husband upon her death.  In addition to the foregoing, upon John Doe's passing, his children, the Transfer on Death beneficiaries were the vested beneficiaries pursuant to his Will, and therefore are the sole heirs of John Doe and Jane Doe.

FURTHER AFFIANT SAITH NAUGHT

Since this is for the sake of mere intellectual debate, we will assume that no probate case was ever opened for either John or Jane Doe.  The question presented is: Does this affidavit clear up the cloud on title created by the failure to record the power of attorney, or should an estate be opened to probate the interest of the Doe's?

Ohio Revised Code § 1337.04 states: "A power of attorney for the conveyance, mortgage, or lease of an interest in real property must be recorded in the office of the county recorder of the county in which such property is situated, previous to the recording of a deed, mortgage, or lease by virtue of such power of attorney."

Clearly, the mandatory language of this statute was not followed - this is the "oversight" mentioned in the affidavit.  But, this is not the only problem.  Ohio case law also establishes that a "power of attorney does not authorize an attorney-in-fact to transfer the principal's property to the attorney-in-fact ..., unless the power of attorney explicitly confers this power."  Because there was never a power of attorney of record, no title examiner could possibly know if this power was "explicitly conferred" on the attorney-in-fact.

In fact, looking at the affidavit, one cannot even be sure that a power of attorney was ever even executed.  Without such knowledge, it cannot not even be ascertained if John Doe actually had any authority to act as Jane Doe's attorney-in-fact.

This would lead to a conclusion that the deed from Jane Doe to John Doe was void and of no effect whatsoever.  Despite this fact, the county entered all of the appropriate conveyances as if they were valid and title is shown in the names of the children of John and Jane Doe.

Paragraph 6 of the affidavit purports to clear this mess up by letting us know what would have happened to Jane Doe's interest in the property, assuming it did not transfer through the deeds that were recorded.  Assuming that the deed from John to Jane was void, Jane retained a half interest in the property.  At some point, Jane passed away.  The affidavit doesn't tell us when this happened, but it does state that her interest would have passed to her husband, John.  It is unclear whether this would have been a result of intestacy or by her will. 

The next question is - did she pass away before or after the Transfer on Death Deed was executed.  If it was after, only John's half interest would have passed to their children as transfer on death beneficiaries.  But, the affidavit further tells us that their children were also the beneficiaries of his will, so we eventually get to the same place anyway.

Seeing as how the children were the only heirs of John and Jane and they are both now deceased, it does appear that the children are the lawful owners.  But don't we still need a probate case to be sure of that?  What about potential creditors of the estates?  What about potential estate tax liabilities?  What about potential Medicare liens?  These are questions that the affidavit does not answer.

[This isn't a file we are working on, so we didn't check to see if there were any estate cases filed.  There may have been, which may answer some of these questions.  But, even if there were estates filed, this property was not conveyed through the probate process. Should any estates be reopened to address this issue?]

There are methods for conveying property outside of the probate estate: transfer on death designations, survivorship, trusts, etc.  When these methods aren't used (or not used properly) probate is necessary, isn't it?

If this affidavit is sufficient to conclusively vest the full interest in the property in the children, one has wonder... why bother with probate at all?  Couldn't we just wait until the owner passes away and file an affidavit in lieu of probate and save the family a lot of time and expense?

Ohio Revised Code § 5301.252 allows for an Affidavit of Facts relating to title which provides that "when... recorded, such affidavit... shall be evidence of the facts stated, insofar as such facts affect title to real estate."  The affidavit may relate to, among other things, heirship.  However, the statute also provides that "every affidavit provided for under this section shall include a description of the land, title to which may be affected by facts stated in such affidavit, and a reference to an instrument of record containing such description, and shall state the name of the person appearing by the record to be the owner of such land at the time of the recording of the affidavit.

This affidavit has no description, only vague references to other instruments which do not include any specific instrument numbers or volumes and pages, and it does not state the record owner of the land, though it may be presumed that the children are shown as the record owners.

It is clear that this conveyance was not handled correctly, thus the need to file the affidavit.  But, it could be argued whether or not the affidavit is effective in correcting the problem.  Is the title to this property marketable?

On one hand, the affidavit does purport to tell us that whether or not the conveyances were effective, we arrive at the same place - title vested in the Doe's children.  But it does this by telling us what would have happened upon the deaths of John and Jane Doe.  The fact remains that it did not happen in the probate court and there is no official record, other than this affidavit, that conveys Jane's half interest.

Let me know what you think... I don't believe that there is a correct answer (or at least, I do not know what it is), only opinions.

Robert A. Franco
SOURCE OF TITLE