Declaration of Homestead: What Are My Homestead Rights?

For most of us, our home is our largest asset. We live in our homes today and we count on our home's equity for retirement tomorrow. We all have homeowner's insurance to protect that investment from fire and casualty. However, most homeowner's fail to take the simple steps to protect their home from the reach of creditor's and themselves from getting sued. For the cost of drafting and filing a Declaration of Homestead with the appropriate Registry of Deeds, The Massachusetts Homestead Act, Massachusetts General Laws, Chapter 188, protects a family's use and possession of their home from the claims of creditors.

Under normal circumstances, if a creditor obtains a judgment against the homeowner by suing them in court, the creditor can satisfy their judgment by forcing a sale of the property unless the homeowner takes advantage of the Homestead Act. The Homestead Act provides that a homeowner and his or her family are entitled to an Estate of Homestead which protects the equity in their home to the extent of $500,000. As such, the property is exempt, up to the exemption amount, from the laws which allow creditors to force the sale of a homeowner's property to payoff debt.

The protections of the Homestead Act are not automatic but are triggered by the recording of Declaration of Homestead in the appropriate Registry of Deeds. The protection of the Act extends to both spouses and their minor children; however, the Act applies regardless of the homeowner's marital status or whether they have children. The rights under the Homestead survive the death of the declaring homeowner and continue to benefit a surviving spouse and their minor children.

Of course as with any legal matter, there are exceptions. Among the common exceptions, the Homestead Act does not protect a homeowner for failure to pay taxes, debt contracted prior to the acquisition of the Estate of Homestead, debt contracted for the purchase of the home and alimony or child support.

The Homestead Act only applies to the homeowner's principal residence, so a homeowner can only have an Estate of Homestead in one home. The residence can be a single family, multi-family, condominium or apartment house, as long as; the property is the homeowner's principal residence. The property can be owned solely or jointly. The Act does not apply to second homes or vacation properties.

The Homestead Act also contains a special provision for the elderly and disabled. For most homeowner's who are not disabled or who are under the age of 62, the maximum protection of the Act is $500,000. However, for each homeowner who is elderly (over the age of 62) or disabled there is a $500,000 exemption. For example, a married couple, who both are over the age of 62, can claim $1,000,000 as an exemption. A special Declaration of Homestead must be filed in the appropriate Registry of Deeds to take advantage of the special provision for the elderly and disabled.

We will pay hundreds, even thousands of dollars, on a yearly basis to protect our homes from fire or other disasters. Yet, so many homeowners fail to protect themselves and their homes from lawsuits and creditors. For the negligible cost and effort to take advantage of the Homestead of Act, it only makes sense.