After nearly a decade of legislative attempts to update the Homestead Law in Massachusetts, the Commonwealth of Massachusetts passed a comprehensive reform that took effect in March of 2011.
What is a ‘homestead?’
An estate of homestead is a type of protection for a person’s primary residence. A homestead estate exempts a certain amount of the equity of a home from attachment, seizure, execution on judgment, levy and sale for the unsecured debts of the owner of the home, with a few exceptions.
Key Points of the new Homestead Law
- There is now an automatic homestead protection for $125,000 for each homeowner or couple. You do not need to do anything to have the benefit of this protection. If the real estate is owned by more than one person who hold title as joint tenants or tenants by the entirety, they will each have an automatic homestead of $125,000, but the aggregate will be capped at $125,000. Multiple tenants in common and beneficiaries of trusts have the $125,000 automatic homestead allocated in accordance with their percentage interest. To illustrate, a tenant in common with a ten percent interest would have an automatic homestead of $12,500.00. The total homestead protection for all owners can not exceed $125,000.00.
- Instead of the automatic homestead, a homeowner can increase his/her homestead protection by recording a written declaration with the applicable Registry of Deeds or Land Court District thereby increasing the protection to $500,000. This protection of $500,000 is shared by spouses who own their home together and by non-married joint tenants. Tenants in common who file such a declaration receive protection in the amount of $500,000 multiplied by their percentage interest in the property. To illustrate, a tenant in common with a thirty percent interest would have an automatic homestead of $150,00.00. The total homestead protection for all owners can not exceed $500,000 total.
- Homeowners who are elderly (over 62) or disabled (following federal law definitions) and who record a written declaration of elderly/disabled homestead at the applicable Registry of Deeds are entitled to a separate individual $500,000 homestead protection. If there is shared ownership of the home, then the elderly/disabled homestead can be “stacked” or combined with another homestead to increase the total protection to more than $500,000.
- Homes owned by a trust or trusts for beneficiaries who occupy the home as a primary residence now qualify for homestead protection. This is a major improvement to the prior homestead statute.
- For all mortgage loan closings on a principal residence, closing attorneys must provide you with notice of your right to declare a homestead protection. The notice must include, but not be limited to, a summary of the differences between the automatic protection and the enhanced benefits acquired by making a declaration.
- You do not have to re-file a homestead after a refinance. Under the new law, homesteads are automatically subordinate to mortgages, and lenders are specifically prohibited from having borrowers waive or release a homestead.
- All existing homesteads in effect as of March 16, 2011 (the effective date of the new law), continue to be effective and will be governed by the new law.
For more information on Homesteads or for assistance in preparing and filing a written declaration of Homestead, please contact one of the real estate Attorneys at Simmons & Schiavo. LLP.
Our attorneys prepare Homestead Declarations as part of our estate planning package as a means to protect your home.
Our homestead declaration lawyers are located in Malden, Massachusetts and we serve clients throughout Norfolk County, Middlesex County and Essex County, Massachusetts. If you have a question concerning any of our areas of expertise or are in need of legal counsel, please contact our firm. We offer a no-cost initial consultation with an experienced attorney to assess your particular legal situation.We also offer legal services in Spanish and Italian.
The Massachusetts Homestead Declaration and estate planning attorneys at Simmons & Schiavo concentrate in estate planning, and elder law matters and serve the Greater Boston and Boston’s North Shore region including the communities of Everett, Revere, Chelsea, Somerville, Cambridge, Medford, Arlington, Winchester, Woburn, Burlington, Stoneham, Melrose, Wakefield, Saugus, Lynn, Peabody, Salem, Marblehead, Swampscott, Norfolk County, Middlesex County and Essex County, Massachusetts.