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The Massachusetts Homestead Act, Massachusetts General Laws Chapter 188, is a statute that protects the equity in a home, up to $500,000, against unsecured creditor claims.

The homestead estate is designed to protect home ownership from execution and forced sale, so long as the owner or covered family member occupies or intends to occupy the property as his or her principal place of residence.

Am I Eligible?

You must own a home in Massachusetts and that home may be a:

• single family home;
• 2 – 4 unit multi-family dwelling;
• condominium unit;
• mobile home; or
• cooperative housing unit.

The home must be:

• your principal residence; and
• occupied by you, or you must intend to occupy the home.

Your ownership may be as a:

• sole owner;
• tenant in common;
• joint tenant;
• tenant by the entirety (for married couples);
• life estate holder; or
• beneficiary of a home held in trust.

Types of Homesteads

• Automatic Homestead

By law, homeowners, and the homeowner’s family members occupying the home, automatically receive homestead protection in $125,000 of the equity of their home.

• Declared Homestead

By filing a Declaration of Homestead with the Registry of Deeds, homeowners, and the homeowner’s family members occupying the home, receive homestead protection in $500,000 of the equity in their home. When the home is owned by a married couple, both spouses must sign the Declaration of Homestead. When a home is owned in a trust, the trustee must execute a Declaration of Homestead on behalf of the trust’s beneficiaries. The trustee must identify the beneficiaries occupying the home and the spouse of any resident beneficiary occupying the home.

• Declared Homestead by Elderly or Disable Persons

By filing a Declaration of Homestead in the Registry of Deeds, homeowners aged 62 or older and disabled homeowners receive homestead protection in $500,000 of the equity in their home. To establish a disability, either an original or certified copy of a disability award letter, issued by the U.S. Social Security Administration, or a certification letter, signed by a licensed physician registered with the Massachusetts Board of Registration in Medicine, must be attached to the Homestead form. Each elderly or disabled homeowner, regardless of marital status, is eligible for a personal exemption up to $500,000. If two elderly or disabled persons own the same home, both qualify for elderly or disabled homestead protection, increasing the total homestead protection eligibility to $1,000,000. If several people own a home together and one owner qualifies for the elderly or disabled Homestead and another owner does not, each owner may file a Homestead Declaration.

What is and What is not Protected

A Homestead protects you:

• If you pass away, the homestead protection continues for your spouse, family members and minor children who occupy the home as their principal residence.
• If you refinance, your existing Homestead remains in effect.
• If you sell your home, the proceeds of the sale are protected until you buy a new home, or for one year, whichever happens first.
• If your home is destroyed by fire or other casualty, the proceeds from your insurance claim are protected until the repairs are complete, or until you buy a new home, or for two years, whichever comes first.

A Homestead protects the equity in your home up to $500,000 against:

• attachment;
• seizure;
• execution on a judgment;
• levy;
• sale;
• attachments and executions issued by Massachusetts courts may be filed at the Registry of Deeds against a property, even though a homeowner has homestead protection. To prevent an attachment or execution from being issued by a court, a homeowner may challenge the attachment or execution in court and raise the homestead protection as a defense.

A Homestead does not protect against:

• federal, state or local taxes or liens;
• liens on the property which existed prior to the date that a Declaration of Homestead was filed, with exceptions when you file a bankruptcy;
• court orders for spousal or child support;
• mortgages on the home;
• attachments to land not owned by a person who has filed a Homestead;
• court ordered judgments based on fraud, mistake, duress, undue influence or lack of capacity;
• Medicaid liens for a homeowner’s stay in a nursing home.

Call The Consumer Bankruptcy Relief Center to learn how filing a low-cost Massachusetts Declaration of Homestead on your primary residence may protect up to $500,000 of the equity in your home in the event you file for bankruptcy.

You can record your own Declaration of Homestead at the Registry of Deeds in your county. For more information, visit: http://www.sec.state.ma.us/rod/rodidx.htm.