I may be the only person who sees the word homestead and imagines old western movies, horse drawn wagons, and cowboys staking a flag in the ground to claim their rights to the land, and or an image of Tom Cruise in the 1992 blockbuster Far and Away in a race to claim his land. Whatever image the word homestead brings to mind, western cowboy land staking turns out to be an apt analogy for the Massachusetts legal document called the Declaration of Homestead. For those of you reading this article who own a property in MA that you occupy, or plan to occupy, as your principal residence, MA wants to offer you protection!
By declaring that the home you own and live in is your principal residence, MA will protect it against creditors for up to $500,000.00, or if you are disabled or 62 years of age or older, up to $1,000,000.00. But that's not all folks, this protection can be had for a low, low, low charge of $35.00 in recording fees paid to your county Registry of Deeds! Yes, that was my best salesman impression.
Now that I piqued your interest, here are the basics of the Massachusetts law known as M.G.L. Chapter 188, or Homesteads. Let me begin with your mantra, like Nike always says, "Just Do It."
1) Do you own a home that you live in or plan to live in as your principal residence? If yes, keep reading. If no, you may one day, so please keep reading anyway. Side note: ownership as an individual, with another person, or even as a trustee of a trust is acceptable.
2) Do you want to protect said home against creditors (or land poachers if we're still on the wild west analogy?) I would love to meet the person that answers no to this question.
Then a Declaration of Homestead needs to be filled out by each owner on the deed to the property, naming their occupying spouse if not on the deed. The document needs to be signed and notarized, and brought to the Registry of Deeds for the county where the home is, and $35.00 paid to have it put on record. You can do this yourself, but I would, of course, recommend speaking with a real estate attorney to do it for you.
Congratulations! You just staked your homestead, or more accurately, created an estate of homestead for the benefit of yourself, being the owner, and your family members who occupy or intend to occupy the home as their principal residence. For the sake of being thorough, there is an automatic estate of homestead created for you when you purchase a home as your principle residence. See, MA loves protecting home owners, but the automatic homestead only provides a $125,000.00 exemption.
The written declaration of an estate of homestead provides an exemption for $500,000.00 from the laws of conveyance, descent, devise, attachment, seizure, execution on judgment, levy and sale for payment of debts or legacies except as follows: the bank you gave a mortgage to, federal, state, or local taxes, assessments, and court ordered support sorry, this doesn't get you out of paying taxes. So more or less, an exemption against creditors, but not voluntary creditors you're not protected by the homestead against a foreclosure if you don't pay your mortgage.
This was a basic explanation. The law gets a little convoluted based on your type of ownership, and some extra language is needed if you are disabled or 62 years old or over. If you are planning to purchase a property or if you want to know more about ways to protect the title to your home, it is always a good idea to speak with a real estate attorney.
David Haimi is a real estate attorney with Lieberman Law Office P.C., with offices in Newton, West Roxbury, Braintree, and Shrewsbury. You may contact him with real estate related legal questions at (781) 235-3200 or e-mail him at firstname.lastname@example.org. To read all posts by Lieberman Law Office click here.