The homestead exemption protects your primary residence from certain creditors so that they cannot force a sale of the home to satisfy payment of a debt.
-Existing Homesteads-
The law does not require Homeowners with existing homesteads to record a new Declaration of Homestead.
-Homes Held in Trust-
An important benefit of the law is that homestead protection applies to homes held in a trust.
-Automatic $125,000.00 Protection-
Massachusetts homeowners have automatic protection of $125,000.00 against debt collectors. The homeowner does not have to take any action to obtain the automatic protection.
-Qualifications-
You must have an ownership interest in the home and occupy it as your principal place of residence.
-Transfers Among Family Members-
Transfers among family members will not terminate an existing homestead protection, even if the homestead is not reserved in the deed.
-Termination-
Homestead protection is not terminated upon the recording of a later Declaration of Homestead. The later recording relates back to the earlier one.
-Sale of Home-
Homestead protection applies to the proceeds from a home sale and will be protected from creditors for up to one year from the date of the sale.
-Coverage-
The protection extends to your spouse and dependent children. The protection does not extend to “second homes.”
-Signatures-
If the home is co-owned by a married couple, and the couple elects to record a Declaration of Homestead, both spouses must sign the document. If a single person declares the homestead protection and subsequently marries, the homestead automatically protects the new spouse.
-Mortgaging/Refinancing-
Mortgages will no longer terminate a previously existing homestead. If a homeowner refinances their home, they DO NOT have to re-file a homestead declaration. Homesteads declaration are automatically subordinate to mortgages. Lenders are specifically prohibited from having borrowers waive or release a homestead.
-Elderly Homestead Protection-
Elderly (age 62 or older) and disabled persons who sign a Declaration of Homestead are each entitled to a separate exemption of up to $500,000.00. This protection applies to the elderly or disabled person alone and is not shared with any other co-owners of the home.
Enhanced $500,000.00 Protection
Massachusetts homeowners may elect to record a Declaration of Homestead in the Registry of Deeds. The Declaration of Homestead will protect up to $500,000.00 of equity in the home from certain creditors. Enhanced homestead protection is not an additional $500,000.00 of protection. Rather, this document increases the automatic protection from $125,000.00 to $500,000.00. The Declaration of Homestead is recorded in the Registry of Deeds in the county where the home is located. If you ever sell your home the homestead protection ends. When a homeowner purchases a new residence, he/she/they must sign a new Declaration of Homestead in order to obtain the enhanced $500,000.00 of protection.
Not Covered
- Debts contracted prior to the acquisition of the Declaration of Homestead;
- Federal, state, and local taxes, assessments, claims, and liens;
Probate Court execution to enforce a judgment for spousal or child support; - Upon a court order to enforce a judgment based upon fraud, mistake, duress, undue influence or lack of capacity.
- Mortgages and Equity Lines held by financial institutions and others; and
- Recovery by MassHealth, and certain other governmental claims.