DECLARATION OF HOMESTEAD

Declaration Of Homestead

For most of us, our house is the biggest investment we will make and the largest asset we own.  It’s also the place we call home.  Make sure you protect it.  Executing a Declaration of Homestead is an inexpensive, yet very powerful way, to protect your home from being seized and sold by creditors to satisfy debts you may incur that are unrelated to your property.

Under the Homestead law, an estate of homestead may be acquired by an owner who occupies a home as his or her principal residence.  The homestead declaration protects the first $500,000 worth of equity that you have in your home against attachment, levy and sale for payment of debts with certain exceptions.  You can only establish one homestead regardless of how many properties you own.  The law is not designed to cover vacation homes or investment properties.  For example, one spouse cannot declare a homestead exemption on one property while the other spouse declares an exemption on another property, unless each can prove that the property is their “principal residence.” Further, unless you are over the age 62 or disabled, only one declaration may be made on your home, but the protection extends to your spouse and your minor, unmarried children.

In Massachusetts, homestead protection is not automatically granted to the owner of a primary residence.  Most commonly, homestead rights are declared in a one-page document recorded in the Registry of Deeds in which the property is located. Homestead rights may also be declared in a deed in which title is taken to the property.   The form for declaring a homestead can be obtained at the Registry of Deeds, and the fee for recording a homestead declaration is presently $35.00 plus postage.  For manufactured homes, the declaration should be filed in the Town Clerk’s office of the town where the home is located.

A homestead declaration must (1) reference the statute under which homestead protection is claimed, (2) reference the book and page (or certificate no.) of the deed in which the declarant obtained the interest to be protected, (3) include a statement of the interest being protected and (4) be recorded.

Homestead protection is not a blanket protection.  It does not protect against debts incurred prior to filing of the homestead declaration.  Nor does it protect against tax bills, court-ordered child support payments, mortgages secured by the property, or any liens imposed by the government, such as a lien for repayment of MassHealth (nursing home) benefits paid on your behalf.  Further, if the home is located on land that the declarant does not own and the landowner is seeking ground rent or if a judgment is based on fraud, mistake, duress, undue influence, or lack of capacity, a homestead will offer no protection.

There is special homestead protection for elderly and disabled persons.  A person who has attained the age of 62 years is eligible to file an elderly person’s declaration of homestead.  A disabled person of any age may also file a special declaration of homestead.

One significant benefit of the elderly or disabled person’s homestead is that it is not limited to one family member.  Each individual having an ownership interest in the principal residence who qualifies can file his or her own declaration of homestead.  In this way, multiple joint owners may claim the homestead in order to combine or “stack” the protection.  The homestead protection afforded by the elderly or disabled person’s homestead is limited in that it will not protect other family members.  Because the protection terminates upon the death of the surviving homestead declarant, the protection will not prevent the imposition of a lien in connection with payments made to or for the benefit of the decedent.  As such, all members of a family entitled to an elderly or disabled person’s homestead protection must declare homestead separately.

The homestead may be terminated in a variety of ways, which leaves the equity in the property exposed to creditors.  In order to avoid inadvertently terminating your homestead, you should be familiar with the various means of termination, including (1) any transfer of the property that does not reserve the homestead protection, (2) a written recordable release by the declarant terminating the protection, (3) acquisition of a subsequent homestead, (4) termination of the use of the property as a principal residence, (5) failure to qualify under either the regular homestead or the elderly and disabled homestead, or (6) death, except for where protection continues for the spouse and minor children.

Despite the limitations of the homestead declaration, it is an invaluable and inexpensive way to protect your home from a variety of claims.  If you own a primary residence in Massachusetts, you should be certain that you have obtained this protection.   If you are not, you should contact your attorney to ensure that you have the greatest amount of protection available to you.

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