Homestead Exemptions
Recent Changes to the Homestead Law
Every homeowner should make sure that their property is protected by their rights under the Massachusetts Homestead Law. The Homestead is a legal designation that a homeowner can place on their principal residence, to protect their equity in the property from certain types of unsecured debts, including credit cards, medical costs, and other expenditures.
The new Homestead law (M.G.L. c. 188) automatically protects $125,000, without having to take any action. By taking the very simple step of declaring a Homestead, by filing the right paperwork with the Registry of Deeds, a homeowner can increase that amount to $500,000.
A Homestead Declaration can protect the equity in your home from creditors, with the exception of Mortgages, several kinds of governmental liens, and liens recorded before the filing of the Homestead Declaration. For this reason, it is important that you not delay in filing and establishing the homestead; the longer you wait, the less protected you are.
It is important to remember that the Homestead is established on the specific property. It does not “travel” with you if you sell the property and move. Many people file a Declaration of Homestead alongside the recording of the new Deed.
The recent revisions in the Homestead law also has several other benefits for homeowners. The protection now extends to the sale or insurance proceeds, for a limited period. Property held in a trust, and occupied by the trust’s beneficiaries, is also now eligible for Homesteads.
Additionally, the Homestead protections are effectively increased for the elderly and disabled. Before, the Homestead exemption for spouses and joint tenants was capped, and a portion of the protection was allocated between the owners. With the recent revisions, elderly or disabled homeowners can each get the full amount of protection through the Homestead declaration.
A Homestead Declaration is a very easy and inexpensive way to protect your property, contact your attorney to take the first step.
The new Homestead law (M.G.L. c. 188) automatically protects $125,000, without having to take any action. By taking the very simple step of declaring a Homestead, by filing the right paperwork with the Registry of Deeds, a homeowner can increase that amount to $500,000.
A Homestead Declaration can protect the equity in your home from creditors, with the exception of Mortgages, several kinds of governmental liens, and liens recorded before the filing of the Homestead Declaration. For this reason, it is important that you not delay in filing and establishing the homestead; the longer you wait, the less protected you are.
It is important to remember that the Homestead is established on the specific property. It does not “travel” with you if you sell the property and move. Many people file a Declaration of Homestead alongside the recording of the new Deed.
The recent revisions in the Homestead law also has several other benefits for homeowners. The protection now extends to the sale or insurance proceeds, for a limited period. Property held in a trust, and occupied by the trust’s beneficiaries, is also now eligible for Homesteads.
Additionally, the Homestead protections are effectively increased for the elderly and disabled. Before, the Homestead exemption for spouses and joint tenants was capped, and a portion of the protection was allocated between the owners. With the recent revisions, elderly or disabled homeowners can each get the full amount of protection through the Homestead declaration.
A Homestead Declaration is a very easy and inexpensive way to protect your property, contact your attorney to take the first step.
Copyright © 2012 Patricia S. Nelson