A new Massachusetts Homestead Protection Act was recently passed into law.

Why is this important to know?

Because it is one of the easiest, most affordable actions a homeowner could take to protect their precious equity in their primary residence.

 

What does this new law do for me?

It protects the equity in a person’s primary residence for up to $500,000 from most creditors, or other parties, in the event a homeowner is sued. It prevents the creditors who sue from “attaching” and subsequently “levying” their claim upon an execution of sale.

 

How do I take advantage of this protection?

The procedure is simple. A Homestead form is filed at the homeowner’s county registry. A Declaration of Homestead is prepared and recorded upon payment of a state recording fee. Only one person in a married couple needs to file to protect him or herself, and this act can serve to protect the other spouse, too.

 

Does this protect my primary residence from all creditors?

No. The law does not protect against claims by mortgage holders used to purchase the primary residence, as may include first and second mortgages. Nor does the law protect against claims related to local, state and federal taxes, assessments, claims and liens, judgments to pay support of a spouse or minor children, or debts contracted prior to the homeowners acquisition of the homestead. There may be other actions for which there is no protection, thus, you should ask your legal representative to review your particular circumstances with you.

 

What is Automatic Homestead?

This new law automatically provides protection for up to $125,000 of home equity for all homeowners, on their primary residence, even if the homeowner(s) have not yet filed a Declaration of Homestead. If you meet the requirements for the 125,000 limit of protection, nothing needs to be filed. However, if you choose to protect your equity up to $500,000, you must take action.

 

What if I file and then transfer the home to another family member?

Transfers among family members will not terminate a previously declared homestead even if the homestead is not reserved in the deed. Under the former law, homestead rights would have terminated unless the homestead rights were explicitly retained in the transfer of title.

 

Does Homestead protection remain in force if I re-finance?

Yes, provided that as the owner of the property, you intend to occupy the property you are refinancing as your principal residence.

 

What if I receive insurance proceeds from fire or other property damage?

So long as the proceeds relate to your primary residence at the time of the damage, those proceeds would be protected for up to two years.

 

What if I have put my primary residence in a trust?

The new law changes the old law completely. The new law provides protection to beneficiaries of trusts that hold title to the residence, so long it is the beneficiaries’ primary residence.

 

I am 62, or older, OR, I am disabled, what do I do to obtain protection?

Ask us to explain “Elderly/Disabled Homestead” to you. This protection is available only to the person who files.

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