For a $35.00 filing fee at the Registry of Deeds you could file a document called a “Homestead” that can protect the equity in your home from creditors. A Massachusetts homestead attorney can also help you with this filing if you have any questions or concerns.
1. What is the Homestead Act?
In Massachusetts, an estate of Homestead is an interest in real property designed to protect the possession and enjoyment of the owner or owner’s surviving spouse and dependent children against the claims of creditors by protecting the property from execution and forced sale, so long as such person occupies or intends to occupy such property as his or her principal place of residence. M.G.L. c. 188, ss. 1-10.
There are two entirely separate estates of Homestead. The first is the estate of Homestead under M.G.L. c. 188 sec. 1. This Homestead has a value of $500,000.00 and may be declared by an owner of a home for the benefit of his or her family. For the purposes of the Homestead law, the word “family” includes either a parent and child or children, a husband and wife and their children, if any, or a sole owner. The property must be occupied as a principal residence. While the statute directly contradicts itself on this point, it appears that only one spouse may declare a Homestead under M.G.L. c. 188, ss. 1.
The second type of Homestead is the elderly or disabled person Homestead under M.G.L. c. 188 sec. 1A. It is available to people sixty-two (62) years of age or older and disabled persons who meet the requirements of the statute. This Homestead has a value of $500,000.00 per person and may be declared by both spouses. It applies to the individual, not the family.
Homesteads are formalized by recording a Declaration of Homestead form at the Registry of Deeds.
Blank Forms for Declaration of Homestead:
- Declaration of Homestead Elderly or Disabled Person Form
- Declaration of Homestead
All Homesteads must be filed in the county in which the residence is located. Before mailing be sure the form is filled out completely and has been properly notarized, and remember to enclose a check for the proper recording fee. The check should be made payable to the Registry of Deeds.
2. What does the Homestead do?
Upon filing a Declaration of Homestead the real property that serves as an individuals principal residence is protected against attachment, levy on execution and sale for payment of debts for legacies, to satisfy non-exempted debts, to the extent of Five Hundred Thousand Dollars ($500,000.00) for a regular Homestead. For an elderly or disabled person Homestead the same protection applies up to Five Hundred Thousand Dollars ($500,000.00).
3. What are exempted debts? or What debts are not protected by a Homestead Declaration?
The following are exempt from Homestead protection: federal, state, and local taxes, assessments, claims, and liens; first and second mortgages held by financial institutions and others; any and all debts, encumbrances or contracts existing prior to the filing of the declaration of Homestead; an execution issued from the probate court to enforce its judgment that a spouse pay for the support of a spouse or minor children; where buildings on land not owned by the owner of a Homestead estate are attached, levied upon or sold for the ground rent of the lot whereon they stand.
4. What does the Homestead Law mean by a disabled person?
A disabled person is defined as an individual who has any medically determinable permanent physical or mental impairment that would meet the disability requirement of supplemental Social Security. You must attach to the Homestead form a certified copy of a disability letter issued by the United States Social Security Administration, or a letter signed by a licensed physician registered with the Massachusetts Board of Registration in Medicine that states the declarant is disabled as defined in 42 USC 1382 (a) (3) (A) and (C).
5. When I turn 62 do I have to record a new Homestead to get the $500,000 protection?
Yes and No.
No. There are two distinct sections which apply to declaring homesteads. The first, MGL Ch. 188 Sec. 1, commonly used by but not exclusive to persons under the age of 62, allows only one spouse or one owner of a particular piece of property to declare a homestead. This protection runs for the benefit of the individual and their family. This benefit continues to run in the amount of up to $500,000 even after a person reaches the age of 62.
Yes. The second homestead section, MGL Ch. 188 Sec. 1A, applies to disabled persons and persons over the age of 62. More than one spouse (tenant by the entirety) or owner (joint tenant or tenant in common) can declare a homestead under this section of the statute, which runs to the benefit of the individual rather than the family, so it may be advisable to declare a homestead for both spouses or multiple owners under this section. It may provide up to $500,000 in coverage for each owner. By taking advantage of the second section, people can arguably increase the total amount of protection available to them under the statute by adding a spouse or multiple owners.
6. Is the amount of the Homestead calculated from the base value of the real estate or the equity above the mortgage or prior liens?
The law is unclear on this issue. Recent court cases suggest that the Homestead applies to the equity above any exempted liens or encumbrances.
7. Do I have to file a new Homestead every time I re-mortgage or take out a second mortgage or home equity loan?
It depends. The Homestead statute exempts first and second mortgages from Homestead rights, so the chances are that you will not have to re-file. In some cases the mortgage form itself limits the release of Homestead rights to that particular transaction, which negates the necessity of re-filing the Homestead. In other cases, however, the lending institution may require that your Homestead be released prior to refinancing. In that case you would have to re-file.
8. How much does it cost to record a Homestead?
The fee is $35 for recorded land, and $35.00 for registered (Land Court) land.
9. Can (a) trustee(s) file for Homestead protection?
The Massachusetts Land Court has determined that registered land held in a trust cannot be given Homestead protection. There is no such limitation regarding recorded land.
10. Will my Homestead protect my home from being taken if I go into a nursing home?
No. Liens imposed by the Massachusetts Department of Transitional Assistance, as a result of payment of Medicaid benefits, are exempt from Homestead protection.
11. Can I file a Homestead if my primary residence is a mobile home?
Yes. To acquire an estate of Homestead for a mobile home, you must file at the city or town clerk’s office in the city or town in which the mobile home is located, not at the Registry of Deeds.
12. Blank Forms for Declaration of Homestead:
- Declaration of Homestead Elderly or Disabled Person Form*
- Declaration of Homestead *
*(The above information is courtesy of the Barnstable County Registry of Deeds; however, the information is applicable to all counties in Massachusetts)
Find a Massachusetts Homestead Attorney to Help with Filing
If you’re looking to file a Declaration of Homestead, it is suggested that you speak with a Massachusetts homestead attorney. Bridgman Law Office can provide you with a free consultation with a knowledgeable and experienced Massachusetts homestead attorney.