A Massachusetts “homestead” protects an owner's equity in a principal residence from claims of creditors (e.g., persons injured at the residence or at other property of the owner, persons injured in accidents in which the owner is involved, those with whom the owner may have a consumer or business dispute). Historically homestead protection was achieved by filing a written “declaration of homestead” at the registry of deeds serving the location of the residence. Relatively recently legislation provides homeowners with “automatic” homestead protection even in the absence of a written declaration.
The “automatic” homestead protects up to $125,000 in home equity. A written, signed, and recorded declaration of homestead can protect up to $500,000 in home equity. A married couple who together own a home must execute a joint declaration of homestead and an owner who is married but does not own with his or her spouse must name his or her spouse in the written declaration of homestead. Homestead protection extends to the owners' minor children who reside in the home.
Persons over age of sixty two and disabled persons may individually declare homestead protection in the mount of $500,000. For instance, a married couple of which both are over age sixty two may both file a declaration of homestead and obtain combined protection of $1,000,000.
Homestead protection may be terminated only by a subsequent deed to a non-family member, a recorded release of homestead, the abandonment of the home, or the recording of a declaration of homestead on a new home. Obtaining a mortgage on a home subject to homestead protection will not, of itself, terminate the homestead.
Homestead protection is available to the beneficiaries of a revocable trust who use a home owned by a trust as their primary residence.
Homeowners planning their estates should be sure to consider homestead protection.
