For most of us, our home is our largest asset. We live in our homes today and we count on our home’s equity for retirement tomorrow. We have homeowner’s insurance to protect that investment from fire and casualty. However, most homeowner’s fail to take the simple steps to protect their home from the reach of creditor’s and lawsuits. A homeowner is entitled to homestead protection for their principal residence. The homestead estate exempts equity of a home from attachment, seizure, execution on judgment, levy and sale for unsecured debts. The homestead will not protect the homeowner against government taxes, assessment and liens, mortgages, child support orders, execution on judgments based upon fraud, mistake, duress, undue influence or lack of capacity. It should be noted that any liens recorded or vested prior to the creation of the homestead estate are also not subject to homestead protection.
Protection is available for owner-occupied, residential one to four-family homes, condominium units, cooperative apartments and manufactured homes. Once again, the homeowner is only entitled to protection for their principal amount. If there are more than one homeowner, they would share the exemption. A non-owner spouse who lives with the owner is also entitled to share in the homestead protection, as well as, any minor children. If an unmarried owner declares a homestead then subsequently marries, then the declaration will automatically benefit the new spouse upon marriage. Divorce or remarriage will not affect the homestead of the spouse who remains in the home as their principal residence.
A homeowner can increase their homestead up to $500,000.0, if they make a written declaration and record the declaration in the appropriate registry of deeds for the county or district where the home is located. For a principal residence held in trust, the trustee can declare a homestead for the beneficiaries who occupy the home as their principal residence. Homeowners, 62 years of age or older, as well as disabled persons, are entitled to homestead protection of $500,000 for each separate owner who files a declaration. This protection for the elderly and disabled are not shared among co-owners. By way of example, elderly spouses who are co-owners of their principal residence each receive the full $500,000.00 exemption for an aggregate exemption of $1,000,000.
Declaration of Homestead forms may be obtained online from the Massachusetts Secretary of State office and most Registry of Deeds. To find your Registry of Deed, you can look up your city or town here. Fill out the form completely and execute the form in the presence of a Notary Public. There is a $35.00 filing fee. The Declaration of Homestead form can be mailed in or filed in person. The registries will accept personal checks for Declarations of Homestead. If you are looking for convenience, my office can take care of all the details for a nominal charge in addition to the filing fee.
Homeowner’s pay hundreds, even thousands of dollars, on a yearly basis to protect our homes from fire or other disasters. Yet, so many homeowners fail to protect themselves and their homes from lawsuits and creditors. For the negligible cost and effort to take advantage of the Homestead of Act, it only makes sense.