The Homestead Act
PLEASE NOTE: The information below IS NOT A LEGAL OPINION, NOR IS IT INTENDED AS LEGAL OPINION. The information provided here is for informational purposes only for individuals that live in Massachusetts. If you have concerns or questions about Homesteading, PLEASE CONSULT AN ATTORNEY.
Massachusetts General Laws, Ch. 188, §1-10
This informational letter has been designed to answer some of the basic questions asked every day pertaining to the Homestead Act. It is not designed to provide any legal advice or address the practical effect of a claim of Homestead. As in all areas of the law, to fully understand what your rights are you should consult an attorney of your choice. We are here to serve you through providing insurance advice as to how to properly protect your hard earned assets.
Questions & Answers
What is a Declaration of Homestead/Homestead Protection?
An Estate of Homestead is a type of protection for a home or real estate, in the form of a document called a “Declaration of Estate of Homestead”. The form is filed at the Registry of Deeds in the county where the property is located, along with the title/deed to the property. It allows homeowners in Massachusetts to protect their property up to five hundred thousand dollars ($500,000) of the value per residence, per family. $1,000,000 if both spouses over age 62 file separately.
Where do I file my Homestead?
All Homesteads must be filed in the Registry of Deeds for the county in which the residence is located. To acquire a claim 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. Be sure the form is filled out completely and has been properly notarized (Sullivan Insurance has notaries on staff), and remember to enclose a check for the proper recording fee with the Homestead form (if you are having the agency help with your filing you must show up in person to have the documents notarized. Homestead forms may be obtained at most Registries of Deeds, online or at the agency. They are also available at legal stationery stores.
Who has the right to acquire a Homestead?
An owner or owners of a home who occupy or intend to occupy said home as a principal residence may acquire an estate of homestead to the extent of five hundred thousand dollars ($500,000.00) and upon filing of such shall be protected against attachment, levy on execution or sale to satisfy debt (except for certain cases that are specifically excluded by the statue); provided that only one owner may acquire an estate of homestead in the home for the benefit of his/her family (meaning only husband or wife need file to get protection for both).
The statute defines owner to "include a sole owner, joint tenant, tenant by the entirety or tenant in common" it also defines family to "include either a parent and a child or children, a husband and wife and their children, if any, or a sole owner." Therefore, anyone with an ownership interest should file (unless married to party filing)!
Note: Prior to October 26, 2004, the amount protected under a Homestead was only three hundred thousand dollars ($300,000). Homesteads filed prior to October 26, 2004, will automatically be eligible for the
increased protection of five hundred thousand dollars ($500,000), provided however, the
increase shall not have priority over and shall be subordinate to, any lien, right or interest
recorded or filed before October 26, 2004.
How am I protected?
The real property or manufactured home which serves as an individual’s principal residence upon filing a declaration of Homestead, shall be protected against attachment, levy on execution or sale to satisfy debts to the extent of five hundred thousand dollars ($500,000) per residence, per family. The statute further states that “For the purposes of this Chapter, the word ‘family’ shall include either a parent and a child or children, a husband and wife and their children, if any, or a sole owner”. Thus, a single person who is the sole owner of a primary residence may file for a Homestead protection to the extent of five hundred thousand dollars ($500,000). Be sure to use the proper Homestead form when you are filing as there are different forms!
*An example of the benefit of homestead is the following: a property owner is in a car accident for which he or she is deemed to be at fault. The injuries to others are significant, exceeding the owner's automobile insurance limits. The declaration of homestead will protect the owner's residence from the claims of the injured persons during the owner’s life. Without a homestead, the property may be sold to satisfy the claims of those injured.
How am I protected if I am 62 or older, or disabled?
The real property or manufactured homes of persons sixty-two (62) years of age or older, regardless of marital status, or of a disabled person or persons, (as defined in the statute definition set forth below), regardless of age, shall be protected against attachment, seizure or execution of judgment (except for certain cases that are specifically excluded by statute) to the extent of Five Hundred Thousand Dollars ($500,000.00) each; provided such person occupies or intends to occupy the home as their principal residence. Therefore, each individual will be eligible for protection of up to Five Hundred Thousand Dollars ($500,000).
Note: Prior to October 26, 2004, the amount protected under a Homestead for the Elderly or disabled was only three hundred thousand dollars ($300,000). Homesteads for the Elderly or disabled filed prior to October 26, 2004, will automatically be eligible for the increased protection of five hundred thousand dollars ($500,000), provided however, the increase shall not have priority over and shall be subordinate to, any lien, right or interest recorded or filed before October 26, 2004.
Can my Homestead be terminated?
The estate or claim of Homestead will be terminated upon the sale or transfer of the real property or mobile home during the declarant’s lifetime, upon the death of the declarant and the remarriage of the declarant’s surviving spouse and upon each child reaching the age of majority or by a release of the Homestead estate duly signed, sealed, and acknowledged by the declarant, and recorded at the Registry of Deeds, or when the property ceases to be the principal residence.
What happens to my Homestead if I should re-mortgage or take out a second mortgage or equity loan?
In some cases, the lending institution may require that your Homestead be released. In that case, once the mortgage is recorded or registered, you can record a new Homestead declaration. The statute, in some cases, exempts first and second mortgages from Homestead rights, so the chances are you will not have to release a Homestead to refinance or obtain a home equity loan –BE CAREFUL not to sign away rights without knowing it! Also, most standard mortgage forms used today have a specific release of Homestead rights for that particular transaction, which negates the necessity to file a general release of Homestead, but in all cases you should thoroughly examine the facts and re-file if there is any doubt!
If I am over 62 and my spouse is under 62, should we both file?
Only one joint owner under 62 years of age can file a Homestead for the family.
However, for elderly and disabled individuals, the protection up to Five Hundred
Thousand Dollars ($500,000.00) exists for each person's ownership interest. Therefore, it is recommended that the person over 62 years of age file for the larger protection. As the other individual owner turns 62, he/she should also apply.
Will my Homestead protect my home if I receive Mass Health benefits (i.e. go into a Nursing Home or Hospital, receive prescription drug benefits or receive any other type of Mass Health benefits or assistance)?
No. Liens imposed as a result of the payment of Mass Health benefits or assistance, are exempt from the Homestead protection. Upon a Mass Health member's death, the Commonwealth may file a claim for reimbursement from the member's probate estate. The rules and regulations regarding Mass Health benefits and assistance are complicated and constantly changing. You should seek competent counsel to address your specific concerns.
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 either the original or a certified copy of the award 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. Disabled persons must meet the disability requirements stated in 42 USC 1382 (a) (3) (A) and (C). Basically, an individual is considered disabled – for the purpose of this law – if he or she cannot engage in any gainful activity as a result of the physical or mental impairment.
Are my spouse and children covered, should I pass away?
Yes. Should the parent who declares the Homestead die, the law protects the residence until the youngest unmarried child reaches the age of eighteen (18) and until the surviving spouse dies or remarries.
Is there anything I will NOT be protected from?
The following are exempt from the Homestead Law:
§ federal, state and local taxes, assessments, claims, and liens;
§ first and second mortgages held by financial institutions or others;
§ 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.
§ upon an execution issued from a court of competent jurisdiction to enforce its judgment based upon fraud, mistake, duress, undue influence or lack of capacity.
Can (a) trustee(s) file for home Homestead protection?
Massachusetts Supreme Judicial Court has determined that registered land held in trust cannot be given Homestead protection. The case did not address recorded land. Until there is court clarification, we suggest you record a Homestead, even if your property is in trust and is not registered land.
If I spend equal time between my winter and summer residences, can I declare a Homestead on both?
No. A Homestead can be declared only on an applicant’s “principal residence”. A person can have more than one residence but the MA statute only allows the protection on one’s legal domicile. There is no legislative intent to allow the exemption to apply to a vacation and not primary residence.
For example, a husband cannot declare a Homestead exemption on one residence
while the wife declares the exemption on the other residence, unless each can prove
that the residence is their “principal residence”.
Does the Homestead protection take the place of home insurance?
Absolutely not! The Homestead protection IS NOT a substitute for home insurance or any other type of property or liability insurance. These are separate and distinct types of protection. The Homestead protection will be effective after any liability insurance is used to pay for any judgments that are related to liability incurred under that particular insurance policy (home, automobile, etc.). It is also recommended that every homeowner invest in an umbrella policy for additional liability protection ($1 million or more) so your hard earned assets are not at risk of financial loss. These policies are very inexpensive, commonly $180 for a homeowner(s) with two automobiles if you have adequate underlying limits of liability coverage with your home and auto insurance.
How does the Homestead Act protect a home against unsecured creditors in bankruptcy proceedings?
Remember that the Homestead Declaration protects a homeowner only from unsecured creditors. It will not offer protection from first or second mortgage lenders and/or equity lenders who possess a security interest in a home. If payments are not current on these forms of secured credit, a homeowner runs the risk of losing the home to foreclosure proceedings. In a Chapter 7 bankruptcy, which is an asset liquidation proceeding, a homeowner is allowed to claim certain exemptions which function as asset protection allowances. If a Homestead Declaration is in place, and the state exemptions are claimed, a homeowner would be allowed to retain a much greater portion of the proceeds from a liquidations sale of the home than s/he would be allowed to keep under federal bankruptcy law exemptions. This factor in turn decreases (or eliminates) the possibility that the homeowner would be required to sell his/her home as part of Chapter 7 proceedings.
In all Chapter 13 bankruptcy proceedings, the court will require a homeowner to repay some or all of the unsecured debt over a three- to five-year period. You will be required to repay a percentage of that debt at least equal to that which the unsecured creditors would receive were a homeowner required to proceed under Chapter 7 liquidation regulations. By increasing the amount of the home’s exemption, the Homestead Declaration decreases the proceeds which would become available for repaying unsecured creditors through the Chapter 7 alternative. This may decrease the percentage of the unsecured debt the homeowner would be required to repay through a Chapter 13 proposal.
Where can I obtain additional information about bankruptcy as it applies to Homestead protection?
This information can be discussed with qualified counselors from the Consumer Credit Counseling Service, a private non-profit agency with chapters nationwide. In MA, contact the Consumer Credit Counseling Service of Southern New England at: 1-800-208-2227. Or, contact a competent attorney who handles bankruptcy cases.
Is the Homestead form difficult to understand and fill out?
No. It simply asks for basic information. Just be careful when writing your book and page number or your Certificate of Title number. Both are shown on your deed or you may be able to find them online at the county registry of deeds.
What is the filing fee?
The cost of filing the Declaration of Homestead with the registry of deeds is thirty-five dollars ($35.00, although fees are subject to change), and there may be an administration/handling fee charged by the agent/lawyer/notary or others for filing the declaration on your behalf (typically $75
250.00). The declarant filing must sign the form and his/her signature must be
notarized (must sign the form in the presence of a notary)! Remember, all
declarants over 62 must sign.
How can I tell if my real property is recorded or registered land?
In 85% of the cases, your real property is Recorded Land. Your evidence of title will be a quitclaim deed. If your property were Registered Land, you would have received a large document called an Owner's Duplicate Certificate of Title. Owners’ Duplicate Certificates of Title were eliminated as of April 9, 1997. After this date, you would have received a certified copy of your Certificate of Title. When recording your Homestead at the Registry of Deeds, if you do have Registered Land you must present your Owner's Duplicate Certificate of Title with your Homestead form. Your Owners' Duplicate Certificate of Title will be returned to you at a later date. (If you are still not sure whether your real property is Recorded or Registered, call you Registry of Deeds or visit the registry online)
Certificate of Title: Chapter 174 of the Acts of 2000 guarantees this act shall apply to declarations of homestead recorded or filed for registration pursuant to section 1 or 1A of chapter 188 of the General Laws before, on, or after the effective date of this act, but the increase in the amount of homestead protection for declarations recorded or filed for registration before the effective date of this act shall not have priority over, and shall be subordinate to, any lien, right or interest recorded or filed for registration before the effective date of this act.
If you have any additional questions please contact your attorney or visit the Secretary of the Commonwealth’s website at www.state.ma.us/sec/rod/rodhom/homidx.htm, or contact Kevin at the agency.
To find your county registry of deeds visit the Secretary of State Website at the following link: www.state.ma.us/sec/rod/rodhom/homidx.htm and select your county.
Note: This information contained in this letter was primarily derived from the Secretary of the Commonwealth’s Homestead Act brochure, Essex County South Registry of Deeds, and the Homestead Act informational website listed above.