While the term “homestead” may conjure up images of a settler’s cabin in the Wild West, a homestead is actually a useful way of protecting your most valuable asset – your home – from creditors. A homestead declaration protects the equity in your home from claims of creditors up to $500,000. By filing the appropriate papers to “declare” your home as your homestead, you may be able to retain ownership in the event of a future financial catastrophe.
There are two types of homesteads under Massachusetts law. One establishes general protection for all individuals, while the second type establishes additional protection for elderly and disabled individuals.
The purpose of the homestead is to protect the home of a debtor, debtor’s spouse or debtor’s minor children, from some creditors and their claims. The homestead does not protect against mortgage defaults and government liens including a Medicaid lien. To secure this protection, the homeowner must file a Declaration of Homestead with the Registry of Deeds where the deed to the property is recorded. (One exception: If the property cited in the homestead is a mobile home, then the homestead needs to be filed with the town clerk’s office of the town the home is located in.)
You may file a homestead as long as your home is your primary residence and you own an interest in the home. A homestead may only be filed on a primary residence where you actually live – no vacation homes or rental properties. However, there is no set limit regarding the size or value of the property. Homestead forms may be obtained at most Registries of Deeds.
The homestead law offers additional protection for those over the age of sixty-two or disabled individuals, but declaring a homestead for your home is not a remedy for all situations. The issues and laws surrounding homesteads can be very confusing. If you want to ensure your interests are properly protected, consult with an attorney who specializes in this area of law. A homestead is one of the greatest financial protections available, and it is well worth obtaining professional advice to ensure that it is done correctly.
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Moschella & Winston has specialized in legal planning and protection for individuals and families for over 30 years, and our attorneys are experts in elder, disability and special needs law. Please contact us at info@moschellawinston.com or (617) 776-3300.
