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Frequently Asked Questions: Real Estate Law

What is a declaration of homestead and do I need one on my principal residence?

The Homestead exemption applies to a person's principal residence and protects that residence against the claims of certain creditors, more particularly set forth in the statute, G.L. c. 188.  A person can only have one principal residence, and thus, can only have one Homestead.  Massachusetts has recently enacted changes to the Homestead statute which now provides for an automatic Homestead exemption of $125,000 per owner, subject to certain limitations and requirements of the statute.  However, the statute also now provides that a person can increase the Homestead exemption from $125,000 to $500,000 upon the recording of a Declaration of Homestead with the Registry of Deeds.  Certain persons (such as disabled individuals, and elderly persons over 62 years of age) can, in some instances, increase the total Homestead exemption protection to $1,000,000.  In order to take full benefit of the statute, a written Declaration of Homestead must be recorded in the appropriate Registry of Deeds or Registry District of the Land Court.

Statutory changes also now provide that two (2) Homesteads can be recorded by husband and wife owners (the statute formerly permitted only one such Declaration of Homestead by married individuals) and also provide that the Homestead exemption protection against certain claims of creditors, which claims were not in existence at the time the Homestead became effective, can now be carried forward for defined periods of time to protect the sale proceeds following the sale of the home, or to protect proceeds due following damage as a result of fire or other casualty, on a principal residence which formerly had the benefit of an estate of Homestead. 

The Homestead no longer needs to be subordinated to a new (refinanced) mortgage being recorded against the principal residence, since by statute the Homestead now is automatically subordinated to a new (refinanced) mortgage.

There are now additional categories of persons (i.e., beneficiaries of trusts, tenants, and other persons) who now can take advantage of the protection afforded by the Homestead statute.  The Massachusetts Homestead statute is complicated and a consultation with an attorney, at Coogan, Smith, is highly recommended, to take full advantage of its protection.

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