Your home is not only one of your single largest financial investments, it’s also the place where your family lives and makes memories. The Massachusetts Homestead Act, revised in 2011, helps protect your home from business creditors, lienhodlers, and personal debts.
Under the revised Homestead Act, your principal residence automatically receives a homestead protection of one-hundred and twenty-five thousand dollars ($125,000). However, by recording a Declaration of Homestead in the Registry of Deeds, you can protect up to five-hundred thousand dollars ($500,000) of equity in your home. If you are older than sixty-two or are disabled, you are eligible for even more protection.
If you decide to file a Declaration of Homestead, you should make sure all the owners sign the declaration. Owners eligible to file a declaration include anyone with a legal interest in the property who also uses the property as their primary residence (non-owner spouses and family members are automatically protected as long as they are using the home as their primary residence). Even if you have granted the property to children but hold a life estate in the home, or even if the property has been transferred to a trust but you are one of the beneficiaries of the trust, then a homestead can still be filed. (If the property is in trust, the trustee would file the declaration and name the trust beneficiaries in the declaration.)
Your homestead protects your primary residence from attachment, execution, or seizure for the payment of many types of debt. A homestead does not protect you from all obligations, and some exceptions include claims arising in connection with your mortgages, government taxes and assessments, or court orders regarding payment of alimony or child support. The protections afforded by the Homestead Act are not effective against liens or claims recorded before your Declaration of Homestead is recorded, so consider preparing and recording a homestead now.
If you have any questions about the Homestead Act, or other ways to protect your property, contact me at firstname.lastname@example.org or 413-570-3170.