Declaration of Homestead

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Declaration of Homestead

Why should I opt for a Declaration of Homestead?

An Estate of Homestead is a type of protection for a person’s owner occupied  residence, (condominium units, cooperative apartments, and manufactured housing)  in the form of a document called a “Declaration of Estate of Homestead”. The form is filed at the Registry of Deeds in the county where the property is located, referencing the title/deed to the property. Co-owner’s of a home ‘share” the exemption amount. By filing this form a Homeowner’s homestead protection is increased to $500,000.00.

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, excepting for the following:

 

-       federal, state and local taxes, assessments, claims and liens;

-       liens recorded prior to the creation of the estate;

-       mortgages;

-       orders of the probate court for support;

-       a levy or sale for ground rents (where the homeowner does not own the land); and

-       an execution from a court to enforce a judgment based upon fraud, mistake, duress, undue influence or lack of capacity.

 

How Am I Protected ?

 

Individuals

There is an automatic $125,000 (of the equity of their home) protection in Massachusetts for homes that do not have a Homestead Declaration filed at the Registry of Deeds. Homestead protections now extend to pre-existing debts and the proceeds of a sale or insurance coverage. There is no filing requirement for this automatic coverage. An automatic homestead can be subordinated to an unsecured debt of the homeowner of up to $20,000.00 but the homeowner and any non-owner spouse must consent in writing. A non-owner spouse who lives with the owner has the benefit of the homestead (until terminated in writing). If a single owner with a declared homestead later marries, then the coverage automatically benefits the owner’s new spouse upon marriage. A divorce or remarriage will not affect the spouse who remains in the home as his/her principal residence.

 

Trusts

Trusts are also now eligible for homestead protections for beneficiaries of the trust who occupy the premises as their primary residence.

 

Elderly/Legally Disabled

For those individuals over the age of 62 (elderly) or legally disabled, the law states that a homestead may be filed on each individuals behalf and the aggregate protection increases to $1,000,000.00.