...by Kiley Black
The Massachusetts Homestead Act provides $500,000.00 protection on the recording of a written Declaration of Homestead to a homeowner's primary residence.
This allows the owner to claim the first $500,000 of equity in his or her home above the mortgages on the property. Essentially, this means, if you are sued as a result of an accident or professional liability claim, and your insurance is insufficient, your home is protected up to $500,000.
Homestead should not be considered a substitute for home insurance or other liability insurance. These are separate forms of protection. The Homestead Act will protect you after the liability insurance has paid for any liability.
Homestead Declarations are for primary residences only and do not apply to vacation homes or investment property.
However, there are some debts that are still exempt from the Homestead Law:
- Federal, state and local taxes, assessments, claims, and liens
- Mortgages used to purchase the residence, and in the case of the Elderly Homestead, first and second mortgages held by financial institutions or others
- An execution issued from the Probate Court to enforce a judgment that a spouse pay for the support of a spouse or a minor children
- Debts contracted prior to the acquisition of the Homestead
- A court can enforce its judgment based upon fraud, mistake, duress, undue influence or lack of capacity
Section 1: all individuals may obtain a Homestead.
Section 1A: applies to the elderly who are older than 62, and disabled. This section pertains to obtaining a Homestead in manufactured mobile homes. This section also protects only the owners interest in the home, not spouse or family.
Therefore, under section 1A all owners older than 62 should file a Declaration to protect their interests.