Document transcriptions should always be made as close to the original document--errors and all. Sometimes it is clear that the original document is in error. It is not the job of the transcriptionist to correct the error. Instead put the word sic in brackets after the error, like so "I John give to my daughter William[sic] the farm on which I now live." Sic indicates that the word was copied from the original and the error was not done on the part of the transcriptionist. Use sic whenever it appears that the original is incorrect.
If you feel the need to comment on the error do so in a commentary that clearly is separate from the transcription