Homestead protection is provided to MA property owners and shelters them from unsecured creditors. This is a vital law for any homeowner. The MA homestead law details below addresses the most important components of this law.
Why Property Owners Need This Protection
Property owners gain equity in a home over time. This equity may not be much initially, but can grow to a larger value over time. There are scenarios where creditors or other parties will target that equity to fulfill a financial obligation of an individual. Shielding it can be critical.
Imagine you are in a car accident and the other party sues you and wins, and the damages are beyond the dollar value of your insurance. Your assets, such as real estate, may be used to cover your financial obligation. This is merely one example of many different situations where homestead protection could save you from losing equity.
MA Homestead Law Details
Massachusetts homeowners get an automatic protection of one-hundred and twenty-five thousand dollars (125,000) without filing any forms. A Declaration of Homestead may be filed at the registry of deeds in the county where your primary residence is located to extend the dollar value up to five hundred thousand dollars (500,000). The filing involves a specific form and payment of a filing fee, which differs from county to county but is typically less than one-hundred (100) dollars. If you are purchasing a new home, your closing attorney will provide the information to you.
Homestead protection strictly applies to a primary residence. There are special provisions for individuals over the age of sixty-two (62) and disabled persons. The Homestead Law will not cover all creditors or lawsuits. Exceptions do apply, such as municipal tax assessments, mortgages on the home, and probate court decisions, just to list a few. For complete details on this law, visit the Secretary of State website. The information in this blog is provided as an overview using facts available at the given time. It is subject to change without notice (as changes may apply to the Homestead law). Please always visit the website link included above for current facts.