Should I File a Homestead Exemption?

In Massachusetts there is a law called the Homestead Act under which a homeowner is has limited protection of the value of their home, up to $500,000, against unsecured claims.  The act is designed to protect home owners from a attachment and execution of a forced sale, so long as the owner, or other family members, occupies the home as their primary residence.

Sec. 4 of MGL, Chapter 188 provides an automatic exemption of $125,000 to everyone in the state who owns a home (and lives in it).  Filing a written Declaration of Homestead at the Registry of Deeds in the county where the property is located raises that amount to $500,000.  There is a second category for those who are elderly (defined as 62 or older) or disabled, or if the property is held in trust, which may be higher than $500,000.

Certain debts are not protected by the Homestead exemption such as federal, state and local taxes and liens, mortgages contracted for purchase of the home, debts and encumbrances that existed prior to the filing of the Declaration of Homestead, probate court executions for spousal or child support, and court ordered executions in cases of fraud, mistake, duress, undue influence and lack of capacity.

For more information please contact your trusted financial advisor or attorney.