On this date 11 years ago (March 16, 2011) a new homestead law went into effect in Massachusetts.  To commemorate that anniversary, we present a few highlights of the 2011 Homestead law. 

What is the Massachusetts homestead law?   The Massachusetts homestead law protects a homeowner’s primary residence from forced sale by an unsecured creditor.   That means that if you are sued and your creditor obtains a judgment against you, you cannot be forced to sell your home to satisfy the judgment up to the amount of the homestead protection.  The homestead protection extends to the homeowner’s family which is defined as spouse and minor (under age 21) children. 

How much is the homestead protection?  Under the 2011 Massachusetts law, a homeowner is entitled to automatic homestead protection of $125,000.  However, homeowners who file a Declaration of Homestead with the Registry of Deeds can increase that protection to $500,000.   For married couples where both spouses are over the age of 62, the homestead protection can be doubled to $1 million by filing an ‘elderly’ homestead.  Increased homestead protection is also available to disabled individuals. 

If a home is owned in trust is the homestead still available?    Yes.  The 2011 version of the homestead law specifically includes homes owned in trust as eligible for homestead protection.  This was an important change made by the 2011 homestead law as the prior law did not include any reference to homes titled in trust which created a lot of uncertainty.  

Will a Declaration of Homestead protect the home from a lien for nursing home care costs?  No.  A Declaration of Homestead will not protect a home from a lien by the Commonwealth of Massachusetts for Medicaid benefits paid on behalf of the homeowner, and this includes benefits paid for nursing home care.  There may be other ways to protect the home from such a lien, but the homestead does not protect against governmental liens such as for taxes or Medicaid benefits. 

Will a Declaration of Homestead prevent my mortgage holder from foreclosing on my mortgage? No.  The protection of the homestead extends only to unvoluntary, non-governmental liens such as judgment creditors. 

Is the Homestead protection lost if I sell my home?  No.  Under the 2011 version of the homestead law, the proceeds from the sale of a home are protected for up to one year following the sale.  This is an important protection for homeowners who may be involved in a lawsuit and who want to sell their home and move while the lawsuit is ongoing or those whose home is subject to a judgment.  Under the prior law, the homestead protection ended when the home was sold.  This means that a creditor could show up at the closing on the sale of the property and collect the debt if there was a judgment.  Under our current homestead law, if the proceeds from the sale of the home are invested into a new home within the one-year period following the sale, then the proceeds are beyond the reach of a creditor.  The new homestead law protects insurance proceeds received as a result of a fire or other casualty from the reach of creditors for a period of two years. 

Do I need to re-file a Declaration of Homestead if I refinance my mortgage?  No.  The 2011 statute states explicitly that the homestead protection is not waived as to creditors when the homeowner signs a mortgage that includes a waiver of homestead provision.  The waiver of homestead provision in the mortgage relates only to the mortgage (which the homestead does not protect against anyway since it is a voluntary lien).   This was also an important change made by the 2011 homestead law.  Previously, a mortgage filed subsequent to the filing of a Declaration of Homestead terminated the Homestead protection.

While filing a Declaration of Homestead does not make a debt go away, it does protect a homeowner from being forced to sell the home to pay that debt.  I often tell my clients that the homestead is like ‘cheap insurance’ – it only cost $35 to file ($36 in Norfolk County) and it can usually be done by the homeowner without the need for an attorney.  (If your property is held in a trust, consult with your attorney about filing a homestead to make sure is it done properly).  If you have questions about homestead protection or if we can help you with your estate planning needs, please don’t hesitate to contact us.

 Attorney Suzanne R. Sayward is a partner with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts.  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.

March, 2022

© 2022 Samuel, Sayward & Baler LLC

By Attorney Maria Baler (August 2011)

A homestead is one of those “don’t leave home without it” estate plan documents that every Massachusetts homeowner can benefit from. A homestead protects the equity in your home against claims of creditors with a few exceptions. These exceptions include claims for unpaid taxes, your existing mortgage, a court order for support for a spouse or minor child, or an existing lien on the property. A homestead prevents your home from being sold to satisfy a judgment to the extent of the homestead protection. A homestead also protects the rights of family members to occupy the home as their residence. Homestead protection continues for the benefit of the spouse and minor children if the homeowner dies or if the homeowner and spouse divorce.

On March 16, 2011, a new homestead law took effect in Massachusetts, which provides all homeowners with some homestead protection and gives those who take additional steps added protection. Here are five facts you should know about the new homestead law.

1. Automatic homestead protection. The new homestead law provides that every homeowner in Massachusetts has an automatic homestead exemption of $125,000. If the home is owned by more than one person, the homeowners together share the $125,000 of protection. If the equity in your home exceeds $125,000, only a portion of your equity will be protected.

2. Declaration of Homestead. Homeowners who want more than $125,000 of homestead protection may complete, sign and file a Declaration of Homestead with the Registry of Deeds for the county where their home is located, declaring homestead in their residence. A declared homestead will protect the equity in your home up to $500,000. If the home is owned by more than one person, the homeowners together share the $500,000 of protection, except if the person declaring the homestead is age 62 or over, or is disabled – in which case that person is entitled to $500,000 of homestead protection. Any homeowner can file a declared homestead, including those who own a life estate interest in a home.

3. Existing homesteads continue. If you filed a Declaration of Homestead before March 16, 2011, your homestead protection will continue in effect. The amount of protection provided by your old homestead will be $500,000 and you will receive the benefits of the additional protections provided by the new law.

4. Home owned by a Trust. Under the prior homestead law, homestead protection was not available to homeowners who owned their home in a Trust. This created a dilemma for many homeowners who were forced to choose between the benefits of homestead protection and the benefits of ownership of their home in trust. The new law allows you to have your cake and eat it too by providing that Trust beneficiaries are entitled to homestead protection if the Trustees of the Trust file a Declaration of Homestead.

5. Only one home. Homestead protection is available only for a homeowner’s principal residence, not for vacation homes, timeshares, or other properties. However, a home can be a single family home, a multi-family home up to 4-family, a mobile or manufactured home, a condominium unit, or a unit in a residential co-op. If a home is sold, or if it is destroyed by fire or otherwise and insurance proceeds are received by the homeowner, those proceeds are also entitled to homestead protection for a period of time.

The homestead law can be complicated in some respects, and each homeowner should seek legal advice about his or her particular situation in order to ensure receiving the maximum homestead protection. If you would like to take advantage of the protection provided by the new homestead law, or if you are not sure whether you have filed a Declaration of Homestead, consult with your attorney. If you are like most homeowners in Massachusetts, a declared homestead will protect all of the equity in your home from claims of creditors, and will give you additional peace of mind knowing that you and your family will always have a place to call home.

Attorney Maria Baler is an estate planning attorney and a partner with the Dedham firm Samuel, Sayward & Baler LLC. She is also a director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA). For more information, visit www.ssbllc.com.