How do homeowners get a homestead exemption in Massachusetts?The Homestead Statute, chapter 188, exists to protect primary residences from the claims of certain creditors. Massachusetts law now provides for an automatic homestead exemption of $125,000 per owner, subject to certain limitations and requirements of the statute. This exemption applies only to a person’s principal residence, so he can only have one home’s equity protected by the homestead law. The homestead exemption gets increased from $125,000 to $500,000 upon the recording of a declaration of homestead with the Registry of Deeds.

Certain people (such as disabled individuals, and elderly persons over 62 years of age) can, in some instances, increase the total homestead exemption protection to $1,000,000. In order to obtain the greatest protection of the statute, a written declaration of homestead must be recorded in the appropriate Registry of Deeds or Registry District of the Land Court (which will be called a “purported homestead” by the court).

Statutory changes also now provide that a joint homestead declaration may be recorded by husband and wife owners (the statute formerly permitted only one such declaration of homestead by married individuals) and also provides that the homestead exemption protection against certain claims of creditors, which claims were not in existence at the time the new homestead became effective, can now be carried forward for defined periods of time to protect the sale proceeds following the sale of the home, or to protect proceeds due following damage as a result of fire or another casualty, on a principal residence which formerly had the benefit of an estate of homestead.

It should be noted that this protection does not apply to certain debts, most notably federal, state, and local taxes, or to spousal and child support. Despite this limitation, the declaration of homestead is a simple and cost effective method to obtain protection against some creditors. The amended statute clarified that the homestead does not need to be subordinated to a new mortgage being recorded against the principal residence, since now the homestead now is automatically subordinated to a new mortgage.

Another significant change is that there are now additional categories of people, such as beneficiaries of trusts, who can take advantage of the protection afforded by the homestead statute. The homestead statute is complicated, and a consultation with a real estate attorney at Brooks & Crowley is highly recommended to take full advantage of its protection.
Steven J. Brooks
Greater Boston Area real estate attorney with experience in closing deals throughout Massachusetts.