Richard D. Vetstein describes the changes to the Homestead Law. Anyone who owns a house in Massachusetts should know about this home owner benefit.

On March 16th, the revamped Massachusetts Homestead Act went into effect. The new law can be found here. The old homestead act had not been revised in decades and had caused confusion in certain aspects.

For those who don’t know, a homestead is a creditor protection device which protects the equity in a person’s principal residence against certain types of creditor claims up to the homestead amount—either $125,000 or $500,000. Homesteads play an important role in protecting principal residences in personal bankruptcy proceedings.

Here’s a summary of highlights of the new act:
• All Massachusetts homeowners will receive an automatic homestead exemption of $125,000 for protection on their principal residence without having to do anything.
• All residents are eligible for a $500,000 “declared homestead exemption” by filing a declaration of homestead at the registry of deeds. There is a new homestead form which must be used. For married couples, both spouses will now have to sign the form–which is a change from prior practice. The recording fee is $35 in most registries.
• If you already have a homestead recorded at the registry of deeds, you do not have to re-file it. All previously recorded homestead declarations are grandfathered into the new law, and have the full $500,000 protection.