Homestead protection is provided to MA homeowners and shelters a property from unsecured creditors. This is a vital consideration for any homeowner. The MA homestead law overview below covers the most important facets of this law.
Why Property Owners Need This Protection
Homeowners gain equity in a property over time. The amount may not be much in the first few years of ownership, but can increase to a larger amount over time. There are scenarios where creditors or other parties will go after that equity to cover a financial obligation of an individual. Shielding it can be of utmost importance.
In the case where a person who declared homestead passes away, the homestead law protects the right of the family to remain in the property. The equity in the property (up to a certain amount) may not be used to pay off the unsecured debts of the deceased individual. This extends to spouses and children. This is merely one example of many different situations where homestead protection could prevent you from losing equity.
MA Homestead Law Overview
Massachusetts property owners receive protection of one-hundred and twenty-five thousand dollars (125,000) without filing any forms. A Declaration of Homestead can be filed at the local registry of deeds in your county to increase the protection up to five hundred thousand dollars (500,000). The filing involves a specific form and payment of a small filing fee, which varies from county to county but is normally under one-hundred (100) dollars. If you are purchasing a new property, your closing attorney will provide the information to you.
Other Important Facts
Homestead protection only applies to a primary residence. There are specific provisions for individuals over the age of sixty-two (62) and disabled individuals. The Homestead Law will not cover all creditors or scenarios. Exceptions include federal and local tax levies, mortgages on the home, and probate court judgements, just to name a few. For comprehensive information on this law, visit the website for the Secretary of State. The information in this blog is offered as an overview using resources available at the time it was published. It is subject to change without notice (as changes may apply to the Homestead law). Please always consult with the website link above for up to date facts.